Unemployment In US Remains At 9.5 Percent Last Month

07 Aug 2010

On Friday, the Labor Department said that the US economy shed more jobs than expected in July, heightening fears that the world’s largest economy will take years to fully recover from a crippling recession. As per officials, 131000 jobs were lost and unemployment rate remained 9.5 percent last month.

Only 71,000 jobs were created by firms and these figures were seen as a sign of stagnation in US economic recovery and it is expected to take some time to recover.

Bart Van Ark, chief economist of the Conference Board, a business research firm said,"The current pace of employment is too slow to replace the more than eight million jobs lost in the recession -- not in the next year or two, perhaps even not in the next five years." He also added that, “It’s unlikely that industries such as construction and manufacturing will ever return to pre-recession employment levels."

"President Obama's economic policies have failed to create sustainable job growth," said Republican National Committee chairman Michael Steele.

Investors, since months have been waiting anxiously to find an understanding on the economic progress, but the data frequently provided a confused snap shot. That trend appears to be continuing leaving Obama and policy makers facing tough choices about whether new crisis measures are needed.

"The central bank's problem now is that any additional monetary stimulus will require unconventional methods," said Ryan Sweet of Moody's Economy.com. "The cost and benefit trade-off of these are unclear."

But Friday's report prompted calls for the Fed to keep record low interest rates.

"The Fed should remain dovish," said analysts at Societe Generale.