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Unemployment Rate Drops, Even as Payrolls Fall
By Jeannine Aversa
Associated Press Writer
Friday, August 1, 2003; 8:53 AM
The nation's unemployment rate declined to 6.2 percent in July as nearly half a million discouraged Americans stopped looking for a job. Payrolls were cut for the sixth month in a row, suggesting businesses remain cautious and want to keep work forces lean despite budding signs of an economic revival.
The Labor Department's report Friday painted a picture of a job market that remains stubbornly sluggish and continues to frustrate people looking for work.
The economy lost 44,000 jobs in July. While that's an improvement from the 72,000 shed in June, economists were hoping that positions would actually be added. They were forecasting payrolls to go up by around 10,000.
Although the jobless rate dipped to a two-month low of 6.2 percent from a nine-year high of 6.4 percent in June, much of decline's July represented the exodus of 470,000 discouraged people who abandoned job searches because they believed no jobs were available.
The lackluster job market, however, hasn't stopped consumers -- the main force keeping the economy afloat - from spending.
In a second report, consumer spending and Americans' incomes each rose by 0.3 percent in June, the Commerce Department said. The income gain matched economists' expectations, while the spending figure was slightly weaker.
President Bush, mindful of the political defeat his father suffered in 1992 during a weak economy, pushed for a third round of tax cuts, which were passed by Congress in May.
The administration insists the fresh $330 billion package along with previous tax cuts will help the economy grow and eventually create jobs. But Democrats say the cuts have not energized the job market and that they have mainly benefited the wealthy and are helping to plunge the federal budget deficit into a record amount of red ink this year and next.
In July, there were 2 million out-of-work people looking for a job for 27 weeks or longer, about the same level as in June, the government said.
The labor force shrank by 556,000 in July to 146 million, contributing to the decline in the nation's jobless rate. Discouraged workers accounted for a large chunk of those streaming out of the work force during the month.
Manufacturers, hardest hit by the 2001 recession, continued to hemorrhage jobs. The sector lost 71,000 positions in July, marking the 36 month in a row of job losses.
Retailers cut 14,000 jobs in July, and education and health services lost 1,000.
The economy grew at a 2.4 percent rate in the second quarter, helped out by the biggest increase in defense spending since the Korean War. While that was an improvement over the mediocre growth seen in the previous two quarters, it still wasn't strong enough to help the labor market.
Federal Reserve Chairman Alan Greenspan and private economists believe the economy will stage a material rebound in the second half of this year. Bush's tax cuts along with near rock-bottom short-term interest rates should motivate consumers and businesses to spend and invest more, giving the recovery a lift.
Some economists are predicting a growth rate in the second half in the range of 3.5 percent to 4 percent or more.
Even if that turns out to be the case, it will take time for the job market to show real improvement, economists said. Companies, wanting profits to improve and wanting to be more certain of the recovery's strength, will wait before stepping up full-time employment, analysts said.
To help the recovery along, the Federal Reserve cut a key interest rate on June 25 by one-quarter percentage point to 1 percent, a 45-year low. Friday's report may hold the door open to a possible rate reduction at the Fed's next meeting on Aug. 12.
© 2003 The Associated Press
By Jeannine Aversa
Associated Press Writer
Friday, August 1, 2003; 8:53 AM
The nation's unemployment rate declined to 6.2 percent in July as nearly half a million discouraged Americans stopped looking for a job. Payrolls were cut for the sixth month in a row, suggesting businesses remain cautious and want to keep work forces lean despite budding signs of an economic revival.
The Labor Department's report Friday painted a picture of a job market that remains stubbornly sluggish and continues to frustrate people looking for work.
The economy lost 44,000 jobs in July. While that's an improvement from the 72,000 shed in June, economists were hoping that positions would actually be added. They were forecasting payrolls to go up by around 10,000.
Although the jobless rate dipped to a two-month low of 6.2 percent from a nine-year high of 6.4 percent in June, much of decline's July represented the exodus of 470,000 discouraged people who abandoned job searches because they believed no jobs were available.
The lackluster job market, however, hasn't stopped consumers -- the main force keeping the economy afloat - from spending.
In a second report, consumer spending and Americans' incomes each rose by 0.3 percent in June, the Commerce Department said. The income gain matched economists' expectations, while the spending figure was slightly weaker.
President Bush, mindful of the political defeat his father suffered in 1992 during a weak economy, pushed for a third round of tax cuts, which were passed by Congress in May.
The administration insists the fresh $330 billion package along with previous tax cuts will help the economy grow and eventually create jobs. But Democrats say the cuts have not energized the job market and that they have mainly benefited the wealthy and are helping to plunge the federal budget deficit into a record amount of red ink this year and next.
In July, there were 2 million out-of-work people looking for a job for 27 weeks or longer, about the same level as in June, the government said.
The labor force shrank by 556,000 in July to 146 million, contributing to the decline in the nation's jobless rate. Discouraged workers accounted for a large chunk of those streaming out of the work force during the month.
Manufacturers, hardest hit by the 2001 recession, continued to hemorrhage jobs. The sector lost 71,000 positions in July, marking the 36 month in a row of job losses.
Retailers cut 14,000 jobs in July, and education and health services lost 1,000.
The economy grew at a 2.4 percent rate in the second quarter, helped out by the biggest increase in defense spending since the Korean War. While that was an improvement over the mediocre growth seen in the previous two quarters, it still wasn't strong enough to help the labor market.
Federal Reserve Chairman Alan Greenspan and private economists believe the economy will stage a material rebound in the second half of this year. Bush's tax cuts along with near rock-bottom short-term interest rates should motivate consumers and businesses to spend and invest more, giving the recovery a lift.
Some economists are predicting a growth rate in the second half in the range of 3.5 percent to 4 percent or more.
Even if that turns out to be the case, it will take time for the job market to show real improvement, economists said. Companies, wanting profits to improve and wanting to be more certain of the recovery's strength, will wait before stepping up full-time employment, analysts said.
To help the recovery along, the Federal Reserve cut a key interest rate on June 25 by one-quarter percentage point to 1 percent, a 45-year low. Friday's report may hold the door open to a possible rate reduction at the Fed's next meeting on Aug. 12.
© 2003 The Associated Press
http://news.bbc.co.uk/2/hi/business/3114153.stm
Profits at Exxon Mobil, the world's biggest oil company, have more than doubled - boosted by higher gas and oil prices.
The group said that in the last three months profits had jumped to $4.17bn (£2.61bn) from $2.64bn in the same period last year.
Profits at Exxon Mobil, the world's biggest oil company, have more than doubled - boosted by higher gas and oil prices.
The group said that in the last three months profits had jumped to $4.17bn (£2.61bn) from $2.64bn in the same period last year.
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