SLUMP

Unemployment Rate at 9.5%: Companies Are Not Hiring

Markets drop on disappointing jobless data.

American companies added just 71,000 jobs in July—below analysts’ expectations and far under the 200,000 new monthly jobs needed to lower the unemployment rate. The jobless data, reported Friday morning by the Labor Department, sent markets sharply lower. By late Friday morning, the Dow was down over 130 points. “The good news here is we are not falling off a cliff; we are getting job growth,” an economist at Economy.com told CNBC. “But obviously this is not enough. If we don’t see better job growth later this year and next, the recovery is in jeopardy.” The unemployment rate for July remained at 9.5 percent and the “underemployment” rate held at 16.5 percent from June. In total, MSNBC reports that there were 14.6 million people looking for work in July, roughly double the number looking in December 2007, when the recession began. The grimmer-than-expected jobs report will likely put pressure on the Fed, which meets next week, to keep interest rates at record lows.