Number of Jobless People Declines Slightly in Europe

PARIS — While unemployment remained at record levels in percentage terms, the actual number of jobless people in the euro zone fell slightly in July, according to data published on Friday, offering fresh evidence that Europe’s struggling economy was taking tentative steps toward a recovery.

The tiny improvement in employment — which came alongside declining inflation and a survey showing improved confidence among European consumers and business managers — was welcomed as additional evidence that the worst of the region’s downturn was probably over. Still, officials and economists cautioned that the economic health of Europe remained fragile and the pace of recovery highly uneven within the region, underscoring the challenge for policy makers and central bankers.

“The recent improvements are minimal,” said Laszlo Andor, the European Union’s commissioner for employment. “This is no time for celebration or complacency.”

The jobless rate in the 17 countries that share the euro was 12.1 percent in July, adjusting for seasonal effects, according to a report from Eurostat, the European Union statistics agency. That figure has remained unchanged for several months. A year earlier, it was 11.5 percent.

Eurostat estimated that 19.2 million people in the euro area were jobless in July, 15,000 fewer than in from June.

For all 28 countries in the European Union, the number of unemployed fell by 33,000, to 26.7 million, for a rate of 11 percent. The European bloc expanded from 27 members to 28 on July 1, when Croatia joined.

Joblessness in the euro zone has been marching higher almost without interruption for more than five years, declining only briefly at the beginning of 2011. The July data showed the first back-to-back monthly decline in the number of jobless since April 2011.

But while some countries, like Germany, Austria and the Netherlands, have managed to weather the crisis with relatively little human cost, their Southern European neighbors — crippled by the euro zone’s debt crisis — still confront devastating levels of joblessness, particularly among the young.

“Against the background of what we’ve seen over last 18 months, yes, this is good news,” Carsten Brzeski, an economist at ING Bank in Brussels, said of the employment figures. “But tell that to the people who are still unemployed in places like Spain.”

The figures released on Friday again demonstrated the large disparity in growth and unemployment rates.

Unemployment in Germany stood at 5.3 percent in July, while Austria’s rate was 4.8 percent — less than one-fifth the levels recorded in Greece and Spain.

Andrea Broughton, principal research fellow at the Institute for Employment Studies in Brighton, England, emphasized the high levels of youth unemployment in many parts of Europe. In Greece, where the jobless rate is already among Europe’s highest at nearly 28 percent, youth unemployment was 62.9 percent in May, the latest month available for that country. In Spain and Croatia, more than half the young people remain out of work.

Nonetheless, Mr. Brzeski of ING said there were growing signs that Europe’s downturn had bottomed out and that structural reforms introduced in Spain, Portugal and other pockets of Europe’s “periphery” had begun to bear fruit.

He pointed to the European Commission survey of business and consumer confidence for August, which was also released on Friday, showing that optimism among company managers had reached its highest level in two years.

“Unit labor costs in many peripheral countries really have been improving,” he said. There was a nascent sense among businesses in those countries, he added, that “finally, something has been done and it’s showing some effect.”

The confidence survey, conducted by the executive agency of the European Union, showed that sentiment was improving not only in relatively healthy economies like Germany and the Netherlands but also in Italy and Spain, which have been among the hardest hit by the downturn.

The index of sentiment within the euro zone, based on factors including business orders, industrial confidence and hiring plans, rose 2.7 points to 95.2, the European Commission said. Across the European Union, the measure rose 3.1 points to 98.1.

Consumer confidence also improved, thanks mainly to brighter expectations about the economic situation over the next 12 months. Expectations about employment, however, remained unchanged.

Europe’s stagnant economy continued to keep a lid on prices. Eurostat on Friday forecast that annual consumer price inflation would decline to 1.3 percent in August from 1.6 percent a month earlier, largely because of a drop in energy prices.

This low-inflation trend, economists said, provides useful ammunition to the European Central Bank, which remains reluctant to raise its benchmark interest rate from a record low of 0.5 percent.

“As long as inflation remains well behaved and clearly below 2 percent,” Mr. Brzeski said, “I think the E.C.B. can sit very comfortably where it is right now.”

New Claims by Jobless Are Lowest Since 2007

WASHINGTON — A measure of Americans who applied for unemployment benefits over the last month has fallen to its lowest level in almost six years, signaling fewer layoffs.

The Labor Department said on Thursday that the average number of people who applied for benefits over the last four weeks dropped by 6,250, to 335,500. That is the lowest level since November 2007, the month before the Great Recession began.

The four-week average smooths week-to-week fluctuations.

Weekly applications for unemployment aid increased by 5,000 last week to a seasonally adjusted 333,000. But that is up only slightly from the previous week’s five-and-a-half-year low.

The decrease in the four-week average points to a positive trend in recent months. Applications, which are a proxy for layoffs, have fallen more than 10 percent since the start of the year. That has helped drive net job gains this year, which are the number of people hired minus the number who lose or quit their jobs.

Employers added 162,000 jobs last month, the smallest monthly gain since March. And most of the job growth came in lower-paying industries or part-time work. Since January, the economy has added an average of 192,000 jobs a month. But the pace has slowed to 175,000 in the last three months.

When employers are cutting few workers, as they are now, it does not take many hires to create a high net gain.

The job market is improving, largely because layoffs have fallen to pre-recession levels. But while employers are no longer cutting jobs, many remain reluctant to hire in the face of tax increases, federal spending cuts and slower global growth.

Shortcuts: Unemployed and Older, and Facing a Jobless Future

She wonders how to support him in his continued quest to find a job in his field of marketing and financial services while at the same time encouraging him to think about what his life would be like if he never worked in that field or had a full-time job again.

“I wanted to move to what I thought was a healthier place. I wanted to turn the page,” said my friend, who asked to be identified by her middle name, Shelley, since she didn’t want to publicize her family’s situation. “He saw it as vote of no confidence.”

For those over 50 and unemployed, the statistics are grim. While unemployment rates for Americans nearing retirement are lower than for young people who are recently out of school, once out of a job, older workers have a much harder time finding work. Over the last year, according to the Department of Labor, the average duration of unemployment for older people was 53 weeks, compared with 19 weeks for teenagers.

There are numerous reasons — older workers have been hit both by the recession and globalization. They’re more likely to have been laid off from industries that are downsizing, and since their salaries tend to be higher than those of younger workers, they’re attractive targets if layoffs are needed.

Even as they do all the things they’re told to do — network, improve those computer skills, find a new passion and turn it into a job — many struggle with the question of whether their working life as they once knew it is essentially over.

This is something professionals who work with and research the older unemployed say needs to be addressed better than it is now. Helping people figure out how to cope with a future that may not include work, while at the same time encouraging them in their job searches, is a difficult balance, said Nadya Fouad, a professor of educational psychology at the University of Wisconsin-Milwaukee.

Psychologists and others who counsel this cohort need to help them face the grief of losing a job, and also to understand that jobs and job-hunting are far different now from how they used to be.

“The contract used to be, ‘I am a loyal employee and you are a loyal employer. I promise to work for you my entire career and you train, promote, give benefits and a pension when I retire.’ Now you can’t count on any of that,” she said. “The onus is all on the employee to have a portfolio of skills that can be transferable.”

People in their 20s and 30s know that they need to market themselves and always be on the lookout for better opportunities, she said, something that may seem foreign to those in their 50s and 60s.

If a counselor or psychologist “doesn’t understand how the world of work has changed, they’re not helping at all,” she said. “You can’t just talk about how it feels.”

In response to this concern, Professor Fouad and her colleagues have drawn up guidelines for the American Psychological Association to help psychotherapists better assist their clients with workplace issues and unemployment. It is wending its way through the association’s committees.

Of course, not everyone who is unemployed and over 50 is equal. For some, the reality is that they need to find another job – any job – to survive. Others have resources that can allow them to spend more time looking for a job that might have the salary or status of their former position.

In the first case, Professor Fouad said, “You need to decide what is the minimum amount of money you can make and how to go about finding it.” In the second case, she said, it’s necessary to examine what work means to you and how that may have to change.

Is it the high social status? The identity? The relationship with co-workers?

It is important to examine these areas, perhaps with the help of a professional counselor, Professor Fouad said, to discover how to find such meaning or relationships in other areas of life.

Sometimes simply changing the way you look at your situation can help.

Jobless Claims Fall Sharply

Thursday's data bolsters the view that economic growth could pick up after a dismal first half of the year in which consumers were smacked by tax hikes and deep cuts in the federal budget.

"This is an encouraging sign heading into the second half of the year," said Ryan Sweet, senior economist at Moody's Analytics in West Chester, Pennsylvania.

Fed Chairman Ben Bernanke expects the economy will gather enough steam by the end of the year for the Fed to begin scaling back a bond-purchase program it has used to push down borrowing costs, and Thursday's data appeared to support his case.

The Philadelphia Federal Reserve Bank said factory activity in eastern Pennsylvania, southern New Jersey and Delaware rose to its highest level in more than two years as employment and shipments picked up.

The bank's index of business activity index rose to 19.8 from 12.5 in June, far exceeding economists' expectations. Any reading above zero indicates expansion in the region's manufacturing.

The report adds to early signs that U.S. manufacturing is expanding despite weakness in the global economy. The New York Fed said on Monday factory activity accelerated in New York state in July.

LABOR MARKET RESILIENCE

In a separate report, the Labor Department said initial claims for state unemployment benefits dropped by 24,000 to a seasonally adjusted 334,000. It was the lowest reading since May and a steeper fall than analysts had expected.

The drop in new claims was the latest data to point to resilience in the labor market. While Washington's austerity measures appear to have dragged heavily on growth in the first and second quarters, the pace of hiring has barely slowed, with employers adding 195,000 jobs in June.

At the same time, the labor market data from last week was clouded by seasonal factors. Readings for claims can be volatile in July because many auto factories close to retool, and it is difficult for the government to adjust the data for seasonal swings because shutdown schedules vary from year to year.

Still, a four-week average of new claims, which smoothes out volatility, fell 5,250 from a week earlier.

"This is still consistent with moderate job growth," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

The dollar extended a rally against the yen and yields rose for long-term U.S. government debt, signs that investors were betting on tighter monetary policy in the future. U.S. stocks rose to record highs after investment bank Morgan Stanley posted stronger-than-expected profits.

The jobless claims data covered the same week in which the Labor Department looks at employers' payrolls to estimate how many jobs the economy added during the full month. Compared to the survey week for last month, the four-week average for claims was 0.7 percent lower last week.

A third report showed a gauge of future U.S. economic activity held at a near five-year high, with the Conference Board's Leading Economic Index flat at 95.3 last month.

Bernanke, who appeared before lawmakers for the second straight day on Thursday, repeated his message that the Fed would only begin withdrawing its support if the economy improves as much as policymakers expect.

In a potentially negative sign for the labor market, the Labor Department said the number of people still receiving benefits under regular state programs after an initial week of aid rose 91,000 to 3.1 million in the week ended July 6.

However, analysts said the increase could also be related to difficulties in adjusting the data for seasonal swings around America's July 4 holiday.

(This story is corrected to show jobless claims at lowest level since May, not March)

(Reporting by Jason Lange; Additional reporting by Rodrigo Campos and Richard Leong in New York; Editing by Andrea Ricci and Neil Stempleman)

New Jobless Claims Drop, Partly for Seasonal Reasons

The drop left unemployment benefit applications at the lowest level in 10 weeks, the Labor Department said on Thursday. Some of the decline may have been caused by seasonal factors.

Still, the broader trend has been favorable. The four-week average, which smooths out fluctuations, fell 5,250, to 351,000.

“We believe labor market conditions remain on a gradually improving trajectory,” said Laura Rosner, an economist at BNP Paribas.

Weekly applications data can be volatile in July. Automakers typically shut their factories in the first two weeks of the month to prepare for new models, which leads to a temporary spike in layoffs. But this year, much of the industry has skipped or shortened the shutdowns to keep up with stronger demand.

Applications are a proxy for layoffs. They have declined 5 percent since January. The drop has coincided with stronger job growth.

Employers added an average of 202,000 jobs a month through the first six months of the year, up from an average of 180,000 in the previous six months. In June, they added 195,000 jobs.

More than 4.5 million people received unemployment aid in the week ending June 29, the latest data available. That’s down just 1,900 from the previous week. The number of recipients has fallen 21 percent in the last year.

Separately, the Conference Board, a business research group, said on Thursday that its index of leading indicators remained unchanged at 95.3 in June, pointing to modest growth in the coming months. The flat reading followed increases of 0.2 percent in May and 0.8 percent in April.

The longer-term trend has been positive. The index increased 1.7 percent in the first six months of this year. That’s better than the 1.1 percent rise in the previous six months.

The trend “suggests that the economy should continue to experience at least modest growth over the next six to nine months,” Maninder Sibia, an economist at the Economic Advisory Service, said in a note to clients.

U.S. Adds Only 88,000 Jobs; Jobless Rate Falls to 7.6%

American employers added an estimated 88,000 jobs to their payrolls last month, compared with 268,000 in February, according to a Labor Department report released Friday. It was the slowest pace of growth since last June, and less than half of what economists had expected.

It also was the start of a third consecutive spring in which employers tapered off their hiring after a healthy start to the year. Slowdowns in the previous two years could be attributed to flare-ups in the European debt crisis, but this time the cause is less obvious. The recent payroll tax increase or other fiscal tightening in Washington could be partly to blame for the sudden retreat in hiring, but neither seems to be showing up much yet in other relevant economic data.

“People were starting to believe the economy was really picking up steam, and desperately wanted this report to be better,” said Joshua Shapiro, chief economist at MFR Inc. “But that didn’t happen.”

Economists like Mr. Shapiro cautioned that the numbers, which are adjusted for normal seasonal variations, are volatile from month to month and are still subject to revision.

Nonetheless, the closely watched monthly jobs report was discouraging.

The unemployment rate, which comes from a different survey, ticked down to 7.6 percent in March, from 7.7 percent, but for the wrong reason: because more people reported dropping out of the labor force (meaning they are neither working nor looking for work), not because more people were hired.

The labor force participation rate has not been this low — 63.3 percent — since 1979, a time when women were less likely to be working.

Baby boomer retirements may account for part of the slide, but pessimism about job prospects in a mediocre economy still seems to be playing a large role, economists say.

“The drop in the participation rate has been centered on younger workers,” said Mr. Shapiro, “many of whom have given up hope of finding a decent job and are instead continuing in school and racking up enormous amounts of student debt, which has contributed to the recent surge in consumer credit outstanding.”

Investors initially responded to the jobs report by sending the major stock market indexes down more than 1 percent. But as the day went on, strategists sent out reports noting that the economic slowdowns in previous years ended up being temporary. The Standard & Poor’s 500-stock index climbed back to end the day down only 0.4 percent.

“Given the noise in the data you don’t want to set your pants on fire about it,” said Michael Feroli, chief United States economist at JPMorgan Chase.

Job gains in March were concentrated in professional and business services and health care.

The government again shed workers, as it has been doing for most of the last four years, though reductions at the Postal Service accounted for most of the latest decline. Economists expect more government layoffs in the months ahead as the effects of Washington’s across-the-board budget cuts make their way through the system.

“While the recovery was gaining traction before sequestration took effect, these arbitrary and unnecessary cuts to government services will be a headwind in the months to come, and will cut key investments in the nation’s future competitiveness,” Alan B. Krueger, the chairman of President Obama’s Council of Economic Advisers, said in a statement.

The latest report should quiet speculation that the Federal Reserve will take its foot off the monetary accelerator anytime soon, as some had suggested after a spike in hiring in February. Even before Friday’s numbers came out, though, Fed officials had expressed concerns about not only the pace of job growth, but the quality of hiring as well.

“It’s important to look at the types of jobs that are being created because those jobs will directly affect the fortunes and challenges of households and neighborhoods as well as the course of the recovery,” Sarah Bloom Raskin, a member of the Federal Reserve Board, said in a recent speech.

She noted that relatively low-wage sectors like food services and retail businesses had accounted for a large share of the job growth in the last few years; a report in August from the National Employment Law Project, a liberal advocacy group, found that a majority of jobs lost during the recent recession were in the middle range of wages, while a majority of those added during the recovery had been low-paying.

In March, in fact, jobs in food services and drinking places accounted for the largest share of total American employment on record. Today nearly one in 13 American jobs is in this industry.

Ms. Raskin also expressed concern about temporary jobs, which account for a growing share of total employment.

“Temporary help is rapidly approaching a new record,” said Diane Swonk, chief economist at Mesirow Financial, who noted that there was also a rapid increase in temp hiring during the boom years of the 1990s. “That of course means more flexibility for employers, and less job security for workers.”

Perhaps more distressingly, 7.6 million workers who want full-time work can find only part-time work, and their missing work hours do not count toward the official unemployment rate. The number of such workers fell slightly from February, but is still about where it was a year ago.

A broader measure of underemployment, which includes those reluctantly working part time as well as those who want jobs but have stopped looking, stands at 13.8 percent.

At the same time, long-term unemployment — joblessness lasting more than six months — has been a persistent problem ever since the recession ended in the middle of 2009. And it may be partly driven by the fact that many of the jobs available do not pay well enough to be worth taking.

“When I’ve had offers for positions they’re part time or temporary, but the child care I’d need to pay to take the jobs is more costly than what I’d be getting paid for the job itself,” said Linda Rubiano, 37, of Pennsauken, N.J., a single mother with a 3-year-old boy. She was laid off from her paralegal job, which she had held for five years, in January 2012. “It’s really, really frustrating.”

Getting people like Ms. Rubiano back to work soon is critical to the economy’s future, experts say. In many cases, the longer people stay unemployed, the less employable they become.

“This seems to be a long-term sleeper crisis too, as we think about long-term unemployed workers who are in midlife and older workers who are likely dipping into retirement savings in order to stay afloat,” said Christine L. Owens, executive director of the National Employment Law Project. “We’re setting ourselves up for somewhere, 10 years down the road, when a lot of retirees who didn’t expect to live in poverty are going to be in poverty.”

Nathaniel Popper contributed reporting.

Jobless Rate Falls to 7.8%, Lowest Since January 2009

While employers added only a modest 114,000 jobs last month, the jobless rate declined to 7.8 percent from 8.1 percent, even though more people entered the labor force.

Adding to the positive news, job gains were revised upward by 40,000 for July (to 181,000) and by 46,000 for August (to 142,000), which had been considered a disappointing month, casting a slightly rosier hue on the summer slowdown.

The private sector, which has been adding jobs since March 2010, grew by 104,000 workers in September. Governments, where cuts have been a drag on the recovery, added 10,000 jobs.

Manufacturing, one of the bright spots that Mr. Obama has showcased throughout the re-election campaign, fell 16,000 jobs after losing  a revised 22,000  in August, and construction jobs grew by 5,000. The number of temporary jobs, usually considered a harbinger of future growth, fell 2,000.

Coming a month before the presidential election, the jobs report offered ammunition for both sides as the candidates vie to convince voters that each is better equipped to steer the economy.

Mr. Obama can point to the 24th straight month of overall job growth after a severe financial crisis and a drop below the stubborn 8 percent jobless rate that has dogged his presidency. Republicans can — and did on Friday — continue to criticize the slow pace of improvement.

Mitt Romney, the Republican presidential challenger, took particular issue with any positive interpretation of the report.

“This is not what a real recovery looks like,” he said in a statement. “We created fewer jobs in September than in August, and fewer jobs in August than in July, and we’ve lost over 600,000 manufacturing jobs since President Obama took office.”

Representative Kevin Brady, a Republican from Texas and vice chairman of the joint economic committee, said the drop in the unemployment rate “was driven primarily by an increase of 582,000 in the number of workers employed involuntarily in part-time jobs. These workers need and want full-time jobs.”

“If not for all the people who have simply dropped out of the labor force,” Mr. Romney said in his statement, “the real unemployment rate would be closer to 11 percent.”

Representative Eric Cantor of Virginia, the majority leader, conceded that numbers were an improvement but added, “it simply isn’t good enough.” A jobless rate of 7.8 percent “should not be cause for celebration.”

Senate Majority Leader Harry Reid, Democrat from Nevada, countered that “with unemployment dropping below 8 percent to the lowest level in four years, our economy is on the right track.”

Consumers and businesses, too, seem to have divergent views of the economic situation. Consumers have shown increasing confidence as stocks rise and home prices stabilize.

Business leaders have been hanging back, though, more focused on global economic slowing and domestic concerns. They say they are uncertain what the election will mean for the business climate and are waiting in part for a resolution of the so-called fiscal cliff, a host of tax increases and budget cuts that will be triggered at the end of the year if Congress fails to act.

Harry Kazazian, the chief executive officer of Exxel Outdoors, a maker of camping equipment in Alabama, said the election, the fiscal cliff and rapidly shifting regulations had put him in a cautious mood.

With sales on the rise, Exxel has restarted a capital investment plan that it suspended three years ago, but is doing so slowly. “We’re moving forward, but we’re doing it in steps rather than being much more aggressive and putting ourselves out there,” Mr. Kazazian said. “I wouldn’t be surprised if things start turning the other way, meaning down.”

But at a Walmart in Atlanta, shoppers were loosening the reins a bit, buying what they described as small indulgences like scented candle oil and seasonal beer.

Linda Avery, 50, a food service manager, said her income had not changed but her daughter had moved out of the house, reducing her food and utility expenses.

John H. Cushman Jr. contributed reporting from Washington.