June unemployment report shows hiring slowed to standstill
WASHINGTON (AP) — Hiring slowed to a near-standstill last month. Employers added the fewest jobs in nine months and the unemployment rate rose to 9.2 percent.
The economy generated only 18,000 net jobs in June, the Labor Department said Friday. And the number of jobs added in May was revised down to 25,000.
The latest report offered stark evidence that the recovery will be painfully slow. Businesses added the fewest jobs in more than a year. Governments cut 39,000 jobs. Over the past eight months, federal, state and local governments have cut a combined 238,000 positions.
Two years after the recession officially ended, companies are adding fewer workers despite record cash stockpiles and healthy profit margins.
Hiring has slowed sharply in the past two months, after the economy added an average of 215,000 jobs per month in the previous three months.
The economy typically needs to add 125,000 jobs per month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate.
Economists have said that temporary factors have, in part, forced some employers to pull back. High gas prices have cut into consumer spending. And supply-chain disruptions stemming from the Japan crisis slowed U.S. manufacturing production.
In June, hiring was weak in most sectors: Manufacturers added only 6,000 jobs; Education and health care, which added jobs through the recession, was flat; and professional and business services, which include accounting, legal and engineering jobs, grew by only 12,000.
Construction and financial services cut jobs.
The weak economy and slow hiring is causing more people to simply give up looking for work. More than a quarter-million people stopped their job searches in June. That kept the unemployment rate from rising even further. When laid-off workers stop looking for work, they are no longer counted as unemployed.
Including discouraged workers and those working part time, but who would prefer full-time work, the "under-employment" rate jumped from 15.8 percent to 16.2 percent.
Would you like to contribute to this story? Join the discussion.