The pace of U.S. hiring slumped
sharply in June after several months of robust gains, the
government reported on Friday, as employers added fewer than
half the number of payroll jobs forecast and hours of work
The Labor Department said only 112,000 jobs were created
last month, far fewer than the 250,000 that Wall Street
analysts had anticipated. April and May new-job totals were
revised down, to 324,000 and 235,000 respectively, from 346,000
The unemployment rate was unchanged, as expected, at 5.6
June still represented a 10th straight month of job growth
that has added about 1.5 million workers to payrolls, but the
unexpectedly steep slowdown last month may make it harder for
President Bush to campaign for re-election in November on a
claim of accelerating economic momentum.
In a sign of broader weakness, the average workweek eased
to 33.6 hours in June from 33.8 in May, the shortest since a
matching level in December.
All of June's job growth in service industries. The
manufacturing sector lost 11,000 jobs, a reversal after four
straight months in which factories had added jobs following
years of decline.
Bond prices jumped in the wake of the data, because
investors are likely to believe the economy is not as strong as
they had thought in recent weeks. Stocks appeared set to open
lower, likely because of worry that the corporate profits
picture may not be as bright as thought.
The dollar lost value against other global currencies
immediately after the jobs report.
Analysts said the jobs report was a shock but held off
judgment on whether it signaled an impending broader slowdown.
"It was pretty much a weak report, a disappointing report
across the board," said economist Henry Willmore of Barclays
Capital in New York. "But I don't think it changes the
fundamental picture, we would have to see a bit more evidence
before it would start to look like the economy is slowing
The timing, two days after the Federal Reserve boosted
short-term U.S. interest rates by a quarter percentage point
and cited the need to check inflation in a quickening economy,
was striking. Analysts said it meant, at a minimum, that the
U.S. central bank likely would not face pressure to push rates
up more quickly than in the quarter point moves now
"This pace of job creation shows there is still slack in
the labor markets. The bottom line is that this is the type of
number that will allow the Fed to continue its tightening at a
measured pace," said Alex Beuzelin, a foreign exchange market
analyst with Ruesch International in Washington.
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