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July Job Losses Raise Concerns Over US Economic Recovery


U.S. employment dropped for the second straight month in July as private employers did less hiring than hoped and more than 140,000 people who were hired temporarily for the nationwide census were let go. The figures are giving rise to pessimism about the nation's economic recovery.

The Labor Department reported Friday that private employers added 71,000 jobs in July, well below the nearly 200,000 needed each month to reduce the unemployment rate. It's a big indicator that the U.S. labor market and the economy at large are slow to recover from recession.

The report also showed the unemployment rate stayed unchanged at 9.5 percent, with nearly 15 million Americans out of work in July.

At this rate, it would take years to regain the more than eight million jobs that have been lost in this recession.

Keith Hall, the commissioner of the Bureau of Labor Statistics, told the Joint Economic Committee of Congress that the main wave of job losses appears to have ended.

But he warned that the momentum from five consecutive months of gains earlier this year may be lost.

"I think my biggest concern would be that a lot of the strength this year has come from just a couple of months," said Keith Hall. "We had two months there early in the year where the numbers looked up, payroll jobs growth strengthened, and the labor force participation rose, but that seems to have backed off a little bit now. So we're in a weaker spot than we were a few months ago."

The figures come at a bad time for the Obama administration. With midterm elections just a few months away, it is struggling to show that its stimulus measures are turning the economy around. A poor jobs outlook could help Republicans win back many congressional seats in the November polls.

Earlier this week, Federal Reserve Chairman Ben Bernanke said in a speech that there is still a considerable way to go to achieve a full economic recovery. He said he is worried that continued unemployment could erode workers' skills and end up having "long-lasting effects" on America's labor force.

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