By Alex Braun
The U.S. added 117,000 jobs in July, ticking the unemployment rate down to 9.1 percent and adding an unexpected positive note to a brutal week of economic news. But other signals suggest the already-difficult job market may be on shaky ground.
One day after the ninth-largest selloff in the history of the Dow Jones Industrial Average, the July jobs report from the Department of Labor was somewhat positive. But some of those numbers may have been boosted artificially by 1.1. million discouraged workers — people who are not counted in the statistics because they have given up looking for work.
Souring the news was word that Standard & Poor’s, one of three major international credit rating agencies, had downgraded the U.S. credit rating from AAA to AA+ despite a last-minute congressional agreement to raise the debt ceiling — the first downgrade since the U.S. earned a perfect rating in 1917.
What does this news mean for college students about to enter the workforce? For one, the debt deal itself has cut into federal student loans,which will soon force students to start paying interest while they’re still in school. Though hiring has picked up from a year ago, it’s still not at a level that promises to bring down the unemployment rate — especially since a sizable amount of government jobs are expected to be slashed when the debt deal takes affect in the coming months. And lower credit ratings for the U.S. government could lead directly to higher interest rates, which would increase credit card fees, student loan payments and car loans.
Who or what is to blame for the nation’s employment woes? Voice your opinion in the comments.