By Jeannine Aversa
The Associated Press
WASHINGTON - The nation's unemployment rate dipped to 6.2 percent in July, but businesses cut jobs for a sixth month in a row. With jobs scarce, close to half a million people gave up looking.
The Labor Department's report Friday suggested that the job market remains stubbornly sluggish. That's frustrating job seekers on Main Street, discouraging investors on Wall Street and polarizing lawmakers in Washington as they look for a way to get the economy back to full throttle.
Employers chopped 44,000 jobs in July, which brought losses since January to 486,000. Economists had been saying the statistics might show positions had been added, perhaps as many as 10,000.
"Employers remain skeptical. While there are clearly some hopeful signs that the economy is improving, they want to be ... sure that it is not just a flash in the pan," said Ken Mayland, president of ClearView Economics. "Corporate hiring managers want to see a track record of growth before they make permanent new hires."
The jobless rate declined to a two-month low of 6.2 percent from a nine-year high of 6.4 percent in June. The drop, however, reflected people leaving the work force. The civilian labor force declined by 556,000 during the month as people left for any number of reasons.
The report also identified 470,000 people in July who were not looking for work because they were discouraged over job prospects. That was up from 405,000 in July 2002 but down slightly from the 478,000 discouraged people reported for June.
The lackluster job market hasn't stopped shoppers, the main force keeping the economy afloat. Another report Friday showed that consumer spending and Americans' incomes each rose by a modest 0.3 percent in June, the Commerce Department reported.
Business activity in the manufacturing sector expanded in July for the first time in five months, a private research group reported Friday.
The Institute for Supply Management reported that its manufacturing index stood at 51.8 in July, up from 49.8 in June. A reading below 50 indicates that manufacturing activity is slowing, and a reading above 50 indicates expansion.
The index is based on a survey of managers who buy raw materials in 20 industries.
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