U.S. employers add only 80,000 jobs in June
BY FRANCINE KNOWLES Business Reporter firstname.lastname@example.org July 6, 2012 8:12AM
FILE-In this June 13, 2012 file photo, job seekers have their resumes reviewed at a job fair expo in Anaheim, Calif. U.S. employers added only 80,000 jobs in June, a third straight month of weak hiring that shows the economy is still struggling three years after the recession ended. The unemployment rate was unchanged at 8.2 percent, the Labor Department said in its report Friday, July 6, 2012. (AP Photo/Jae C. Hong, File)
Updated: August 8, 2012 6:07AM
The Labor Department’s jobs report showing only 80,000 jobs were added last month from May and the unemployment rate unchanged at 8.2 percent was a “disappointment” that sent the Dow tumbling 124 points Friday.
The lackluster jobs news came a day after a report from payroll processor ADP said employers added 176,000 jobs in June. That prompted some analysts to up their expectations on the Labor Department report, even though ADP’s data has sometimes varied widely from the government report.
“I think the market is disappointed in the report today because it wasn’t so good that that means that we are okay in terms of the economy, and it wasn’t so bad that the Fed is going to feel like it has to intervene,” Morningstar Inc. economist Robert Johnson said Friday.
“It’s more of the same. We’re kind of plodding along with slow employment growth. We’re not busting out on the upside. But we’re not falling apart either.”
June marked the third straight month of weak job growth. The government revised its May report to show that 77,000 jobs were created, more than the 69,000 initially reported, and revised April data to show 68,000 jobs were created, fewer than the 77,000 first thought. The result was 1,000 fewer jobs during the two-month period.
The numbers reflect “a stall speed economy,” said Rebel Cole, a financial economist and professor of finance with DePaul University’s Driehaus College of Business.
In the April-to-June quarter, job growth averaged 75,000 per month, compared with an average of 226,000 the first three months of the year.
The report showed the number of people working part-time due to economic conditions last month rose by 112,000 to 8,210,000.
The total number of unemployed rose by 29,000 to 12,749,000.
Among sectors adding jobs in June were professional and business services, up 47,000; temporary help services, up 25,000; and manufacturing, up 11,000.
Last month’s temp hiring is “evidence of a lack of conviction by employers,” Cole said.
Businesses aren’t hiring permanent workers because they’re worried about uncertainty and will likely sit on the sidelines until after the November presidential election, he contends.
The report showed manufacturing job growth has slowed significantly in recent months. Job growth in the sector averaged 10,000 per month in the second quarter, compared with an average of 41,000 per month in the first quarter.
President Barack Obama, on a two-day bus tour through the contested states of Ohio and Pennsylvania, focused on private companies, which added 84,000 jobs in June and took a longer view of the economy’s ongoing recovery from the worst downturn since the Great Depression.
“Businesses have created 4.4 million new jobs over the past 28 months, including 500,000 new manufacturing jobs,” the president said. “That’s a step in the right direction.”
Mitt Romney, the presumed Republican nominee, said the report showed that Obama, in three and a half years on the job, had not “gotten American working again.
“The president is going to have to stand up and take responsibility for it,” Romney said in Wolfeboro, N.H. “This kick in the gut has got to end.”
There were a couple of bright spots in the report. Average hourly earnings for all employees rose by 6 cents to $23.50, and the average workweek for production and nonsupervisory employees edged up by 0.1 hour to 33.8 hours.
Every tenth of an hour swing in the average workweek in either direction is equivalent to about 200,000 to 300,000 full-time workers, said Anthony Chan, chief economist with Chase Wealth Management at JPMorgan Chase & Co.
“What it really portends for the future is that as the length of the workweek increases, that also raises pent up demand for future labor,” he said. “That means that there are a lot of people out there that are being worked long hours and at some point they can’t work longer hours, so the employer will have to go ahead and hire more people.”
The Dow closed at 12,772.47, down nearly 1 percent.