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U.S. Payrolls Rise 80,000; Jobless Rate 8.2%

Date : 07/06/2012 @ 9:10AM
Source : Dow Jones News

U.S. Payrolls Rise 80,000; Jobless Rate 8.2%

WASHINGTON--U.S. job growth barely picked up in June, the latest sign that economic growth has slowed.

Nonfarm payrolls grew by 80,000 last month, the Labor Department said Friday. The politically important unemployment rate, obtained by a separate survey of U.S. households, was unchanged at 8.2%.

Economists surveyed by Dow Jones Newswires had forecast a gain of 100,000 in payrolls and the steady June jobless rate.

Polls show the economy consistently remains voters' top concern before the November election.

Politically, the latest numbers won't help President Barack Obama as he runs for reelection against Republican challenger Mitt Romney.

The Romney campaign has repeatedly argued that Mr. Obama is handling the economy poorly. The president has defended his jobs record by saying the private sector is growing, but those gains are muted by cuts among state and local governments.

Even with June's numbers coming in stronger than the previous two months, the pace of job creation remains well below figures at the start of the year--the economy added an average of 226,000 jobs a month in the first quarter versus only 75,000 in the second quarter.

May and April payroll numbers saw small revisions with little net effect. Nonfarm payrolls increased by 77,000 in May, compared with the previously reported 69,000, and April payrolls grew by 68,000 versus a previously reported 77,000.

The slowdown in hiring shows that, three years after the recession's end, the economy has failed to gain traction amid broad uncertainty related to Europe's debt crisis, the potential for steep U.S. tax hikes and spending cuts next year, and signs of slower growth in developing countries.

Federal Reserve officials last month lowered their economic growth projections to between 1.9% and 2.4% this year, and forecast the jobless rate will hold between 8.0% and 8.2%.

With more signs that the economy is losing momentum, the Fed last month extended through the end of the year a program known as "Operation Twist," which aims to drive down long-term interest rates and reduce borrowing costs for businesses and households.

Fed Chairman Ben Bernanke made clear in a news conference after the policy makers' June meeting that he is prepared to take further action if he doesn't see progress on bringing down unemployment.

The Labor Department Friday said private companies accounted for all of the growth in June payrolls, adding 84,000 jobs during the month. Governments, meanwhile, cut payrolls by 4,000. The federal workforce shed 7,000 positions.

Employment increased 47,000 in the professional and business services category, led by temporary help services. Companies sometimes add temps before making permanent hires.

Manufacturing, a bright spot in an otherwise tepid recovery, added 11,000 jobs. The pace of factory hiring has tailed off markedly, though, to an average of 10,000 a month in the second quarter from 41,000 a month in the first.

Health care and wholesale trade industries also added jobs.

Average earnings rose 6 cents to $23.50 an hour, while the average workweek inched ahead by 0.1 hour to 34.5 hours.

A broader measure of unemployment--which includes job seekers as well as those stuck in part-time jobs--rose to 14.9% in June from 14.8% the previous month.

The Labor Department's report can be found at http://www.bls.gov/news.release/empsit.nr0.htm/.

Write to Jeffrey Sparshott at jeffrey.sparshott@dowjones.com and Eric Morath t eric.morath@dowjones.com.

-Kristina Peterson contributed to this article.



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