Obama 'deeply concerned' about job figures
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Men wait outside their local union hall after placing their names on the job list in San Marcos, California (Reuters)
United States President Barack Obama says it is going to be a long road to recovery on the back of dire unemployment figures.
Almost another half a million jobs in the US economy were lost in the month of June, pushing the unemployment rate to 9.5 per cent - the highest in 26 years and still growing.
Mr Obama says he was deeply concerned as American families with jobs now wonder if they are next in line to lose theirs.
"Obviously we are deeply concerned about the employment rate. What we are still seeing is too many jobs lost - too many families who are worried about whether they are going to be next," he said.
A US unemployment rate of 12 per cent by the year's end or early next year is not out of the question, according to some economists who were shocked by today's much worse-than-expected monthly job loss figure.
Certainly an 11 per cent unemployment rate by the end of the first quarter of next year is a distinct possibility.
There were 467,000 jobs lost in the month of June - a figure which triggered a sell-off on Wall Street, initially sending all 30 companies on the Dow into the red.
Since the recession began 18 months ago, the US economy has lost a total of 6.5 million jobs and the unemployment rate is almost double.
Today's job loss figure also rocked faith in a modest second half of the year recovery in the US economy.
Earlier this year the Obama administration projected the unemployment rate would top out at about 8 per cent because of the trillion dollar stimulus package.
But much of that stimulus money is still in the pipeline, with less than 10 per cent of the proposed spending actually spent.
White House spokesman Robert Gibbs today continued to argue the stimulus was working and the recession was slowing.
"From November of 2008 through I believe March of 2009, the average job loss for those months approached 700,000," he said.
"In the most previous quarter, that job loss average was 436,000 so I think there is a sense that the beginnings of stabilisation are taking hold and hopefully the worst job loss is behind us."
The numbers of people now out of work, and the effect the rising unemployment rate has on confidence, poses the biggest hurdle to recover.
Chief investment officer with Cumberland Advisers, David Kotok, says the recovery will be slow.
"I don't know about jobless recovery but it is very slow. We take this unemployment rate into the tens and then it stays there and it comes off very, very slowly," he said.
Jobless numbers released today reinforced the view that unemployment levels will be high not only for months, but even years to come.
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