Streak of job gains ends in June
Hiring in private sector rises, but jobless rate falls as thousands halt their search for work
The phasing out of 225,000 temporary census workers left total U.S. payrolls down by 125,000 jobs in June, but the private sector expanded by 83,000 jobs and the nation’s unemployment rate dropped to 9.5 percent, the lowest level since last July, the Bureau of Labor Statistics reported Friday.
Although the census cutback led to the first monthly reduction in total U.S. jobs in six months, the expansion of private-sector employment continued for a sixth consecutive month.
“We are headed in the right direction, but … we’re not headed there fast enough,” President Barack Obama said Friday.
The census-based drop in jobs was expected. What was surprising was the unemployment rate falling to 9.5 percent, a reduction of 0.2 percentage point from May and of 0.6 percentage point from last year’s high.
However, the decline in the overall unemployment rate is less positive than it appears. The number of people who described themselves as employed actually fell by 301,000. But many more people — 652,000 — counted themselves as no longer being in the labor force at all, possibly out of frustration, pushing the unemployment rate down.
Combined with other recent data, the numbers indicate that the economy is muddling through a period in which job growth is weak and nearly 15 million people are out of work. There is little evidence that a dip back into recession has begun, but the odds have risen that
Continued from previous page growth in the second half of the year will be too weak to create meaningful improvement in the job market.
“The chances of a double dip are still fairly low, but the chances of sluggish growth are quite high,” said Nariman Behravesh, chief economist at the forecasting firm IHS Global Insight. “It’s entirely possible that this is as low as unemployment will get for quite a while.”
In recent weeks, every pillar of the economic recovery that started a year ago has shown signs of weakening. Manufacturers had been cranking up production but now have largely completed rebuilding inventories and are expanding more slowly. The housing market was recovering as well — until the end of a homebuyer tax credit this spring. Consumer confidence plummeted in June.
“People are still really cautious, and we haven’t seen small businesses engage in any substantial way,” said Roy Krause, chief execu- tive of SFN Group, a large employment services company.
Overall, employers shed 125,000 jobs in June; however, that figure was distorted by the Census Bureau cutting 225,000 temporary jobs. About 100,000 jobs must be created every month just to keep up with growth in the labor force.
The average workweek shrank to 34.1 hours from 34.2, and average hourly earnings at private employers fell by 2 cents to $22.53.
Job creation was strongest in the professional and business services sector, which added 46,000 positions, though nearly half of those were in the temporary-services field. Other sectors to add large number of jobs were leisure and hospitality, which added 37,000, and education and health care, which together added 22,000.
Sectors that slashed jobs included construction, which cut 22,000 positions; financial activities, which shed 15,000 jobs; and state and local governments, which cut 8,000 positions.