US employers add 80,000 jobs as economy struggles
US employers added only 80,000 jobs in June, a third straight month of weak hiring that will likely complicate President Barack Obama's reelection efforts with the economy still struggling three years after the recession ended.business Updated: Jul 08, 2012 07:48 IST
US employers added only 80,000 jobs in June, a third straight month of weak hiring that will likely complicate President Barack Obama's reelection efforts with the economy still struggling three years after the recession ended.
The unemployment rate was unchanged at 8.2 %, the Labor Department said in its report Friday.
The economy added an average of just 75,000 jobs a month in the April-June quarter. That's one-third of the 226,000 a month created in the first quarter. For the first six months of the year, US employers added an average of 150,000 jobs a month. That's fewer than the 161,000 a month for the first half of 2011. And it suggests that three years after the Great Recession officially ended, the job market is weakening instead of strengthening.
"It's a disappointing report," said George Mokrzan, director of economics at Huntington National Bank in Columbus, Ohio. He said the job gains are consistent with sluggish economic growth.
The report is troubling news for Obama, whose prospects of winning re-election in November could hinge largely on the health of the economy. Stock futures fell modestly after the report came out. Dow Jones industrial average futures were down 24 points before the report at 8:30 am (1230 GMT), and were down 76 points minutes later.
Yields for government bonds sank, an indication that investors were putting money into the Treasury market. The yield on the 10-year US Treasury note was 1.59 % just before the report and 1.56 % after it came out.
A weaker job market has made consumers less confident. They have pulled back on spending, even though gas prices have plunged.
High unemployment could shift momentum to Mitt Romney, the presumptive Republican presidential nominee. An Associated Press-GfK poll released last month found that more than half of those surveyed disapproved of Obama's handling of the economy.
The economy is growing too slowly to lower the unemployment rate. Obama is expected to face voters with the highest unemployment rate of any president since the Great Depression, and the economy is the top issue for many voters.
Dismal June job figures could also prompt the Federal Reserve to take further action to try to boost the economy. The Fed last month downgraded its economic outlook for 2012. It predicted growth of just 1.9 % to 2.4 %. And it doesn't expect the unemployment rate to fall much further this year. Revisions to the job gains in April and May were little changed from the government's previous estimates.
There were some good signs in the report. The average work week grew to 34.5 hours from 34.4 in May, boosting many workers' paychecks. And average hourly pay rose 6 cents to $23.50. Hourly pay has increased 2 % in the past year and is ahead of inflation, which has fallen in recent months along with gas prices.
About one-third of the jobs gained in June were in temporary services. Manufacturing added 11,000, its ninth straight month of gains.
But growth in factory jobs slowed sharply in the second quarter compared to the first. Health care added 13,000 jobs and financial services gained 5,000. Retailers, transportation firms and government cut jobs.
First Published: Jul 08, 2012 07:47 IST