The Labor Department reported today that the “U.S. unemployment rate rose to the highest level in more than four years.” According to the data, “the unemployment rate rose to 5.7 percent,” total employment “fell by about 72,000 jobs and unemployment rose by 285,000.” The average hourly earnings rose by just 0.3% to $18.06 per hour, “far behind inflation.” Bloomberg reports:
The last time the unemployment rate climbed so much in four months was in 2001, when the U.S. was last in a recession. Job losses have combined with decreasing property values, stricter lending rules and near-record energy prices to send consumer confidence levels close to the weakest in 16 years in July.
In light of the new data, economists predicted that “the labor market is likely to remain weak, if not deteriorate a bit further.” Indeed, from year to year, unemployment has increased, suggesting that the economy “is in a recession, probably a shallow recession“:
As the middle class continues to struggle from “the weakest job growth since the Great Depression, flat wages, and declining benefits,” corporate profits are at an all time high. Unfortunately, Sen. John McCain (R-AZ) only seeks to add to corporate profit, arguing that cutting corporate taxes by $175 billion will make American corporations more competitive and help American workers. But today’s job figures make it abundantly clear that corporate gains are not trickling down to workers. What’s needed is a stimulus for the middle class, not a tax cut that will go towards corporate profit.