July 2010 Labor Market Data

According to the Bureau of Labor Statistics, so far this year, private sector employment has increased by 630,000 (with about two-thirds of the gain occurring in March and April). The long-term unemployed (those out of work for longer than 26 weeks) is near 45%.


My Brief Take on Labor Market Conditions:

As the effects of government census hiring/firing on payroll employment diminishes, the strength of the private sector hiring is going to be extremely critical. It is important to note that the pace of job growth needs to be rapid enough to (a) absorb those who lost their jobs during the recession (totaling around 8.4 million), and (b) provide employment for new entrants (arising from population growth and demographic shifts).

It is also worth noting that the size of the labor force may shift as some of the 'discouraged workers' return to seek employment as the economic recovery progresses. This may cause a temporary spike in the reported monthly unemployment rate.