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U.S. Shed 467,000 Jobs In June

MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

14.7 million people in the U.S. are out of work as of June. Today's report from the Labor Department says that 467,000 jobs were lost just in June. The unemployment rate has risen to 9.5 percent. That's the highest rate since 1983.

NPR's Chris Arnold has our story on what the numbers tell us.

CHRIS ARNOLD: There had been some hope on Wall Street that the rate of job losses was really starting to move in the right direction. Back this past winter, the economy was losing a ton of jobs, more than 700,000 in the month of January alone. But this spring, the monthly job loss numbers improved steadily. In May, we only lost 320,000 jobs.

Mr. NARIMAN BEHRAVESH (Chief Economist, IHS Global Insight): And so based on that, a lot of analysts, including ourselves, thought that the June number would show another improvement - somewhere say between 300 and 350,000 instead of the 467,000. This, I think surprised everybody.

ARNOLD: Nariman Behravesh is chief economist of the forecasting firm IHS Global Insight.

Mr. BEHRAVESH: This is a bad number. There's no way to sugar-coat that pill and the unemployment rate went up to 9.5 percent. But it's also important to say that these numbers never move in a straight line, so in that sense I think this may be a bit of fluke.

ARNOLD: Okay. So one month popping back up doesn't send you, you know, panicking.

Mr. BEHRAVESH: That's correct. I think there's enough information coming out about other parts of the economy on other indicators that suggest that we are bottoming out. Things are on the mend, the recovery is around the corner.

ARNOLD: Behravesh says that the housing market is showing some signs of stabilizing and consumers don't seem to be as panicked as they once were. Parts of the credit markets have improved a lot. Still, the economy so far is continuing to lose jobs.

Mr. JAMIE MCGREGOR (McGregor Metalworking Companies): Well, I'd say last September we employed roughly 400 people and, you know, we're down to about 225 people.

ARNOLD: That's Jamie McGregor who helps to run his third generation family business, the McGregor Metalworking Companies in Springfield, Ohio. The business makes metal parts for trains, tractors, exercise gear, cars, and other equipment. And McGregor says it's not just cars that have seen sales tumble during the recession.

Mr. MCGREGOR: The people who make lawn tractors are making fewer, the people that make treadmills are making fewer, the people that make ATVs are making fewer than they did a year ago as well.

ARNOLD: And that means job cuts. McGregor says laying off almost half his workers over the past year has been one of the hardest things he ever had to do. Some he's known all of his life. He remembers one employee in particular.

Mr. MCGREGOR: You know, this is the same guy that, when I was seven years old and came in with my boxcar derby car for the Boy Scouts, helped me put it together and build it for the race. You know, having to sit across to that guy, you know, explain to him that unfortunately in the reorganization we didn't have a place for him was a gut-wrenching thing.

ARNOLD: McGregor says though that he is actually optimistic that his family's company has now cut enough jobs that it can weather the storm. He's actually bought some more equipment recently and he expects work to increase with new car and tractor models coming out. John Graham is a finance professor at Duke University.

Professor JOHN GRAHAM (Finance, Duke University): Well, I would say maybe half of companies have already cut to the bone and they are hunkered down. Hopefully they have cash saved up or they have a line of credit or something they can rely on. And I don't think those companies will continue to lay people off.

ARNOLD: But he says other companies are in worse shape and are having a tougher time borrowing money. Graham does a survey with CFO magazine of 500 chief financial officers around the country. Many are still planning layoffs. So even if the economy starts to recover sooner, Graham and Nariman Behravesh don't see unemployment falling lower until the first half of 2010.

Chris Arnold, NPR News. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Chris Arnold
NPR correspondent Chris Arnold is based in Boston. His reports are heard regularly on NPR's award-winning newsmagazines Morning Edition, All Things Considered, and Weekend Edition. He joined NPR in 1996 and was based in San Francisco before moving to Boston in 2001.