The July snapshot of the job market proved that the government sector has declined in jobs and the private sector has barely expanded. As evidence to this fact are 14.6 million Americans still jobless, government employment which has fallen by 59,000 and the economy shedding 131,000 jobs after 143,000 temporary census workers were removed from the federal payrolls.

The employment rate remained steady at 9.5%. On an average, the private sector has added 90,000 jobs a month this year. In July, the private employment rose to 71,000 after 31,000 in June. Two-thirds of the private sector job creation occurred during the period of March and April.

Tig Gilliam, chief executive, Adecco Group, says, “It’s a double whammy because it causes people to take a psychological step back. Now, it looks like not only has the economy slowed, but maybe it wasn’t as good when it was originally reported as we thought.”

The Dow Jones Industrial Average initially went down to 160 points but later it rose 21 points to 10,653.56. The 10-year treasury yield plummeted to 2.82 percent following demand for US government debt. The two-year note dropped to 0.514 percent after an all time low of 0.494 percent during the day.

Congress, White House, and the Federal Reserve came under pressure to increase the measures being taken to bring growth in the labor market. Fed officials are considering on reinvesting proceeds from mortgage-backed securities so as to continue support to the economy.

Without strong evidence of economic stability, even expanding sectors seem wary of adding new jobs. Private employers have increased their shift timings instead of making new recruits. Overall weekly work hours rose 0.3 % and in manufacturing 0.5 %.

In July after 9 straight months of growth, temporary employment declined to 5,600. This is supported by government figures. Mr. Gilliam of Adecco says “momentum has slowed dramatically. If that’s the case and that’s where we’re going for the next couple of months, it suggests a step back in the job-market recovery.”

Since last July, state and local governments have cut 48,000 jobs. To aid state governments, a $26 billion package is set to be released but this will only be minimally effective. A weak labor market would levy pressure on incomes and consumer spending. In June, consumer credit dropped at a 0.7% annual rate. Revolving credit declined at a 6.5% rate. 6.6 million people remained jobless for 27 weeks and this accounted to 44.9% of unemployment.

Job seekers choosing to open their own businesses dropped to a record low, according to Challenger, Gray & Christmas, a Chicago outplacement firm.

Just 3.7 percent of high-level job seekers exiting the program were starting new businesses down from 7.6 percent in the first half of 2009 and 9.6 percent in the second half of last year, according to a survey conducted by the company on July 19.

Experts suggest that an improving job market and the difficulty getting small business loans may be steering people away from entrepreneurship, said Business Week.

Federal Reserve Chairman Ben Bernanke said last week that small businesses, and especially startups, are crucial to job growth and economic recovery. Bernanke once again called on banks to loosen credit to small businesses.

Some see the lower startup rate as a sign that the economy is improving. The unemployment rate is still high, but the private sector added 593,000 jobs in the first half of 2010, according the Bureau of Labor Statistics.

Startup activity typically increases as the economy improves, Challenger CEO John Challenger said in a statement.

The recession has reshaped the job market, and even in a recovery some of the 7.2 million unemployed workers in the U.S. will find their former jobs no longer exist, said the Wall Street Journal.

Many of the construction jobs created by the housing boom will probably not return, which spells trouble for men without a college education. More than 1.6 million construction jobs were lost in the past two years. And many high-paying jobs in the financial sector may not be coming back, said the Journal.

The recession also hastened the end of jobs that were already becoming obsolete thanks to advancing technology. The ranks of administrative and clerical workers fell by 10 percent in the past two years, and even as the economy recovers many of those tasks will become automated, said the Journal.

The permanent loss of these jobs will likely slow a recovery, as it will take time to create new types of jobs and retrain workers to do them, said the Journal.

A drop in the November unemployment rate provided a glimmer of hope that the unrelentingly bleak job market may be headed for a turnaround.

The unemployment rate unexpectedly fell to 10 percent last month, from 10.2 percent in October, as employers cut the fewest number of jobs since the recession began. The average work week and earnings also rose in November, the Labor Department reported.

The economy shed 11,000 jobs last month, an improvement from October’s revised total of 111,000 lost jobs, and significantly better than the 130,000 Wall Street economists had expected in November, said the Associated Press.

Economists say that substantial job growth is needed to make a dent in the unemployment rate. According to the Labor Department, 15.4 million unemployed people are seeking work, and 11.5 million others are working part-time but want full-time jobs or have given up job hunting altogether.

In a troubling sign for small businesses, a survey by the National Federation of Independent Business showed more small companies plan to reduce employment in the next three months than plan to add jobs, said the AP.