Saturday, 9 July 2011

US jobs creation stalls in June

8 July 2011 Last updated at 16:18 GMT President Obama: "We still have a long way to go to give people the security and opportunity they deserve"

The number of new jobs created in the US in June was the lowest in nine months as the employment recovery stalled, new data has shown.

Only 18,000 new jobs were created in the month, way below expectations of a 90,000 rise, which had been raised by strong private sector hiring figures released on Thursday.

The unemployment rate also rose, to 9.2% from 9.1% a month earlier.

President Obama said the report showed the US still had "a long way to go".

"We have added two million new private sector jobs over the last 16 months, but the recession cost us 8 million," he said in a statement at the White House.

"That means we still have a big hole to fill."

The worse-than-expected numbers sent global stock markets lower.

US markets opened lower, with the Dow Jones down 87 points, or 0.7%, at 12,633. The dollar also fell a cent against the euro.

The main European markets all closed more than 1% down following the release of the figures.

'Unemployment crisis' Continue reading the main story "Every aspect of this disappointing report points to the US facing an unemployment crisis," said Mohammed El Erian, the investments head at giant US fund manager Pimco.

Total unemployment in the US was largely unchanged versus a month earlier, at 14.1 million, although this is up by well over half a million since March.

Long-term unemployment at 6.3 million was similarly stagnant, as was the total of 8.6 million people working part-time because they could not find full-time work.

"Everyone was looking for a bounce this month to try to confirm the fact that May's slowdown is an anomaly," said Alexander Hoder, economist at investments firm FTN Financial. "But it appears it will be longer than just one month."

The figures show that fewer than 50,000 jobs were created in the US economy in May and June. This represents a sharp slowdown from the 217,000 net new jobs created in April.

The poor June result was driven by continuing layoffs by the public sector - where 39,000 jobs were lost - and a much weaker-than-expected 57,000 jobs created in the private sector.

Employment by the federal government fell 14,000 - its sharpest fall since temporary workers hired for the census finished work last year.

Continue reading the main story
The percentage of all Americans, men and women, in work is lower than it has been at any time since the early 1980s, when that first space shuttle was launched. ”

End Quote image of Stephanie Flanders Stephanie Flanders Economics editor, BBC News "Employment in most major private-sector industries changed little over the month," said the Bureau of Labor Statistics in its release.

The financial sector saw 15,000 job losses. Meanwhile, manufacturing has not seen any significant hiring in 13 months.

The data also showed that average hourly earnings fell one cent to $22.99, as did the average number of hours worked per week, by 0.1 to 34.3 hours.

The weak data has increased speculation that the US Federal Reserve may ultimately have to adopt a third programme of "quantitative easing" - buying up debts in order to pump cash into the economy - just as its second such programme has come to an end.

us unemployment

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