Tags: Weak Jobs Data Seen Throwing Economy Into Vicious Cycle

Weak Jobs Data Seen Throwing Economy Into Vicious Cycle

Monday, 11 Jul 2011 09:36 AM

Fears that weaker-than-expected jobs figures will stay dismal for a while are going to crimp consumer spending, which delays hiring and with it, more robust economic recovery, experts say.

Employers added 18,000 jobs in June, according to government data, far lower than expected.

Many economists are optimistic that the economy will still pick up later this year, but fears are growing that the such weak jobs data will keep consumers at bay.

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(Getty Images photo)
When consumers stay on the sidelines, companies have less incentive to hire, which keeps unemployment rates high and in turn, consumers stay at bay even more: a vicious cycle.

Whatever happens, good news is needed fast.

"We really do need to see some signs that economic growth is picking up in the near future," says Goldman Sachs economist Andrew Tilton, according to The Wall Street Journal.

"The pressure is on."

The June unemployment rate rose to 9.2 percent from 9.1 percent in May and 9.0 percent in April.

Private-sector hiring slipped to its slowest pace in over a year, while the government is shedding workers as stimulus programs wrap up.

The June jobs figures report also shows that more and more workers are dropping out of the job market, giving up looking for work that's just not there.

"June's employment report doesn't have a single redeeming feature," says Paul Ashworth, an economist at Capital Economics, according to the Associated Press.

"It’s awful from start to finish."

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Fears that weaker-than-expected jobs figures will stay dismal for a while are going to crimp consumer spending, which delays hiring and with it, more robust economic recovery, experts say. Employers added 18,000 jobs in June, according to government data, far lower than...
Weak Jobs Data Seen Throwing Economy Into Vicious Cycle
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