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August 6, 2010    

US unemployment rate holds steady at 9.5%

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by Kay Murchie

The Labor Department has revealed the world’s largest economy lost 131,000 jobs last month – again, partly due to the loss of temporary Government jobs, which were recruited to help conduct the 2010 census.

The latest figures means the unemployment rate held steady at 9.5% in July - for the second consecutive month and beating expectations of a rise to 9.6%.

The unchanged jobless rate was primarily due to a fall in the labour force as workers became discouraged and gave up the search for jobs.

The number of unemployed in the US, at 14.6 million, also remained unchanged in July.

The figures come in the same week that the Commerce Department reported consumer spending in the US remained flat in June.

Households in the US continue to be squeezed amid higher unemployment.

Consumer spending, which makes up for more than two-thirds of overall economic activity in the US, was unchanged from May.

There have been fears about the strength of the US economic recovery, particularly as the country continues to grapple with high unemployment.

Higher unemployment and a slowdown in manufacturing have sparked fears of a “double-dip” recession in the world’s largest economy.

However, the housing market also appears to be an area of concern after the end of the Government’s tax credit initiative. This provided up to $8,000 for new buyers and $6,500 for current owners who buy and move into another home.

However, as the effect of the tax credit continues to fade over the next few months, sales and activity are expected to dwindle, according to experts.

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