Jobs report may make market drop more

INDIANAPOLIS (WISH/AP) - Financial markets around the world were bracing for another wild ride Friday, after a massive selloff on Wall Street Thursday. More bad news was expected with the release of the government’s latest jobless report. Some analysts say it will highlight a problem taking root in Central Indiana.

The nation’s unemployment rate rose to 9.2 percent in June — its highest level of the year. Despite expectations that the economy created around 75,000 jobs in June, analysts expect the unemployment rate to remain unchanged when it’s released Friday.

It's the alarming number of long-term jobless that is causing fresh concern for Democratic lawmakers, however.

About 42 percent of the nation's 14.1 million unemployed have been out of work for at least six months, and nearly one in three has been jobless for more than a year. Those numbers are still near record levels set last year, and could be a sign of chronic labor market problems that could derail any lasting economic recovery, according to a report Thursday from Congress' Joint Economic Committee.

Many of these workers suffer because their skill sets no longer fit the needs of employers, the report found. It suggests more investment in job search and training programs would help the long-term unemployed find new work. The group includes disproportionately high rates for workers 55 and older, those with only a high school degree, workers in construction or manufacturing and African American workers.

While Indiana’s June unemployment rate of 8.3 percent is the lowest in the Midwest, a new report this week from the Bureau of Labor Statistics lists the Indianapolis-Carmel Metropolitan Statistical Area as having the second highest drop in employment in the nation over the last 12 months. That report showed unemployment rates up in 345 large metro areas. That’s more than 90 percent of the large metro areas in the country. Only 20 cities saw unemployment numbers drop in June.

The Indianapolis-Carmel MSA unemployment rate was listed at 8.0 percent in June — up from 7.8 percent in May, according to the Labor Department.

Democrats, labor unions and even business groups like the U.S. Chamber of Commerce have called on the government to invest more money to stimulate job growth to help stem the tide. Republicans intent on cutting federal spending have resisted such calls, calling instead for the Obama administration to foster an environment that encourages business to invest, which party leaders say would lead to the creation of new jobs.

Among those unemployed for longer than one year, only 8.7 percent were able to find work, according to recent 12-month statistics from the Bureau of Labor Statistics. Many unemployed workers have been unable to find new jobs despite Labor Department data showing there were nearly 3 million job openings in May, it also stated.

Long-term unemployment currently makes up 4.1 percent of the labor force, down only slightly from a record 4.4 percent in May 2010. Before the recession began in 2007, it stood at less than 1 percent.

Later this year, Congress will consider expanding the Workforce Investment Act, a measure first passed in 1998 to improve the nation's federal programs for job training, unemployment, adult education and vocational rehabilitation. Sen. Patty Murray, D-Wash., said modernizing the law would offer better education and training programs to give workers "the skills and training they need to fill open jobs in businesses across the country."