U.S. payrolls rose 80,000 in June, less than forecast

EMPLOYERS IN THE U.S. hired fewer workers than forecast in June, showing the labor market is making scant progress toward reducing joblessness.
Posted 7/6/12

WASHINGTON - Employers in the U.S. hired fewer workers than forecast in June, showing the labor market is making scant progress toward reducing joblessness.

Payrolls rose 80,000 last month after a 77,000 increase in May, Labor Department figures showed today in Washington. Economists projected a 100,000 gain, according to the median estimate in a Bloomberg News survey.

The unemployment rate held at 8.2 percent. Private employment, which excludes government agencies, increased 84,000 in June, the weakest in 10 months.

Stock-index futures extended losses as the figures indicated hiring has shifted into a lower gear, restricting consumers’ ability to boost spending as concern mounts about a global slowdown. Elevated joblessness underscores concern by some Federal Reserve policy makers that the economy isn’t expanding enough.

“The job market is soft as is the overall the economy,” said David Resler, chief economic adviser at Nomura Securities International Inc., who correctly forecast the jobs gain. “I’d characterize our reaction as much the same way the Fed will react -- not surprised but disappointed. It’s just not the kind of growth we need to see at this stage in the business cycle.”

The contract on the Standard & Poor’s 500 Index expiring in September fell 0.4 percent to 1,367.58 at 8:53 a.m. in New York. The yield on the benchmark 10-year Treasury note dropped to 1.55 percent from 1.60 percent late yesterday.

Economists’ estimates

Estimates for total payrolls from the 84 economists surveyed ranged from increases of 35,000 to 165,000 after a previously reported 69,000 gain in May.

Revisions to prior reports subtracted a total of 1,000 jobs to payrolls in the prior two months.

Private payrolls, which exclude government agencies, climbed after a revised gain of 105,000 that was larger than initially reported. They were projected to advance by 106,000 in June, the survey showed.

June concluded the worst quarter for corporate hiring since the first three months of 2010. Last month’s change in private payrolls reflected a 2,000 increase in education and health services that was the smallest in almost two years.

Jobless rate

The unemployment rate, derived from a separate survey of households, was forecast to hold at 8.2 percent, according to the Bloomberg survey median. Estimates ranged from 8 percent to 8.3 percent. Joblessness has exceeded 8 percent since February 2009, the longest such stretch since monthly records began in 1948.

Factory payrolls increased by 11,000, more than the survey forecast of a 7,000 increase and following a 9,000 increase in the previous month.

Employment at service-providers added 67,000 workers after 98,000. Construction companies added 2,000 workers and retailers cut 5,400 jobs.

Government payrolls decreased by 4,000.

Average hourly earnings rose to $23.50 from $23.44 in the prior month, today’s report showed.

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