Job statistics douse hopes
Hopes that the economy would pick up steam in the second half of the year were quelled by disappointing job statistics released today by the U.S. Labor Department.
Reuters reported that nonfarm payrolls increased by only 18,000 in June from the prior month. It was the weakest reading in nine months and well below the 90,000 rise predicted by economists.
“The message on the economy is ongoing stagnation,” said Pierre Ellis, senior economist at Decision Economics Inc. in New York. “Income growth is marginal, so there’s no indication of momentum.”
The U.S. unemployment rate climbed to a six-month high of 9.2 percent in June, from 9.1 percent a month earlier. Revisions to April and May payrolls indicated that the nation added 44,000 fewer jobs than previously reported.
The private sector added 57,000 positions last month, which accounted for all the jobs created. Governments cut 39,000 jobs as the fiscal problems of local and state governments festered.
To absorb new entrants to the labor force, the economy needs to add between 125,000 and 150,000 new jobs a month, Reuters said.