Economy Lost 62,000 Jobs in June (Update)

Peter Morici, a professor at the University of Maryland and former chief economist at the U.S. International Trade Commission, placed the unemployment rate closer to 7.2%, noting a surge in discouraged workers who have exited the labor force completely. The Labor Department does not factor in those 1.6 million Americans, because they had not actively sought work in the past month.

Morici is bearish on the jobs outlook, noting that highly-skilled workers will continue to find jobs in areas like finance, health care, education and engineering, while those with just a high-school degree will be hard-pressed to find adequate pay and benefits.

"For those workers, who compose about half the working population, the quality of jobs continues to spiral downward," he said in a note Thursday.

Government initiatives to ease the economic crunch -- from lower interest rates to stimulus checks -- have had positive effects, but are certainly not a panacea. Consumers getting squeezed by high costs, declining home values, minimal wage growth and a contracting job market are likely to find a tough slog ahead.

"The real story is that rebate-related income is temporarily plugging a hole in consumer finances," said Zach Pandl, a Lehman Brothers economist. "Basically, the data we're getting is showing a picture of consistent weakness in the job market."

Since payroll employment peaked in December, employers have slashed a total of 438,000 jobs, with particular weakness in construction as the housing bubble burst. The construction sector cut 43,000 more jobs in June. Since its peak in September 2006, that sector has lost 528,000 positions.