U.S. Sheds 125K Jobs; Unemployment Drops To 9.5%
Layoffs of temporary workers for the U.S. Census cut the country's payrolls in June for the first time in six months, while private employers added a modest number of jobs. The unemployment rate fell to 9.5 percent, its lowest level in almost a year.
Employers cut 125,000 jobs last month, the most since October, the Labor Department said Friday.
The loss was driven by the end of 225,000 temporary jobs for the census, the country's headcount that comes every 10 years.
Businesses added a net total of 83,000 workers, an improvement from May. But that's also below March and April totals.
Speaking at Andrews Air Force Base Friday morning, President Barack Obama said the employment report shows the country is "headed in the right direction."
He added, however, "We're not headed there fast enough for a lot of Americans. And we're not headed there fast enough for me either."
Mr. Obama today emphasized that June was the sixth straight month of job growth in the private sector, amounting to nearly 600,000 private economy jobs created this year.
The unemployment rate dropped to the lowest level since July 2009. But it fell because 652,000 people gave up on their job searches and left the labor force. People who are no longer looking for work aren't counted as unemployed.
The report indicates that businesses are still slow to hire amid a weak economic recovery. Analysts expected private payrolls to rise by about 110,000, according to Thomson Reuters.
The bottom line is it could've been worse, reports CBS Moneywatch editor Jill Schlesinger. After a terrible May report and lots of anxiety over weak data over the past month, most investors were relieved that the report wasn't a total bust-out.
Still, private sector employment has slowed. The three-month average is now 119,000, compared to 154,000 from February to April.
The economy needs to add around 125,000 jobs each month just to keep pace with new entrants to the work force and analysts believe that it will take several months with gains 250,000 jobs or more to really put a dent in the unemployment rate, Schlesinger reports.
The stock market appeared opened more or less flat Friday, reflecting investors' mixed feelings about the report.
The nation still has 7.9 million fewer private payroll jobs than it did when the recession began. It takes about 100,000 new jobs a month to keep up with population growth. The economy needs to create jobs at least twice that pace to quickly bring down the jobless rate.
All told, 14.6 million people were looking for work in June. Counting those who have given up their job searches and those who are working part time but would prefer full-time work, the underemployment rate edged down to 16.5 percent from 16.6 percent in May.
Manufacturers, the leisure and hospitality industries, temporary staffing agencies, and education and health services providers all added jobs. Retailers, construction firms and the financial service providers cut payrolls.
Private employers added only 33,000 jobs in May, the department said, below an earlier estimate of 41,000. April private-sector payrolls were revised up to show a total gain of 241,000 jobs, higher than the earlier estimate of 218,000.
The Census Bureau added more than 400,000 workers in May to assist with the 2010 employment count, but most of those jobs lasted only six to eight weeks.
Mr. Obama on Friday assured those out of work that he and his administration are "continuing a relentless effort across multiple fronts" to keep up job creation.
The president announced today 66 new federal projects to bring broadband Internet service to communities that have lacked such service. He said the projects are expected to create 5,000 construction and installation jobs in the near term and should create "immeasurable" gains for the impacted communities in the future.
The jobs figures come after a raft of weak reports Thursday provided the strongest evidence yet that the recovery is slowing. The negative news added to concerns that the nation could be on its way back into recession.
Most notable was a rise in the number of people filing for unemployment benefits for the first time. The four-week average for jobless claims now stands at its highest point since March.
Senate Republicans, expressing concerns about the ballooning federal deficit, this week blocked a bill that would have kept unemployment checks going to people who have been laid off for long stretches.
More than 1.3 million people have been left without federal jobless benefits after Congress adjourned without an extension. That number could grow to 3.3 million by the end of the month if lawmakers can't resolve the impasse when they return.
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