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U.S. Unemployment Reaches 26-Year High; Heavy Manufacturing Losses

The U.S. economy continued to shed jobs last month, and the national unemployment rate rose slightly, according to the U.S. Department of Labor. Approximately 467,000 jobs were lost in June and the unemployment rate rose to 9.5 percent, up from 9.4 percent in May and the highest level in 26 years. The job losses were considerably higher than industry predictions that ranged from 350,000 to 365,000. Employment in the manufacturing sector fell by 136,000, bringing the decline to 1.9 million jobs lost since the recession began in December 2007. Within durable goods industries, motor vehicles and parts lost 27,000 jobs; fabricated metal products lost 18,000; computer and electronic products lost 16,000; and machinery lost 14,000. In other sectors, professional and business services lost 118,000 jobs; construction lost 79,000; financial services lost 27,000; and information lost 21,000, with half the losses coming from publishing. Economists worry that the increase in job losses indicates a slowdown in the overall economic recovery, with particular concern over whether additional economic stimulus from the government is needed. "The stimulus has probably stabilized income, but it has not moved the economy forward," says John E. Silva, chief economist at Wachovia Corporation, quoted in The New York Times. "It's a finger in the dike. But in terms of getting the economy going, there's no evidence of that yet."

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