Hiring slowed to a near-standstill last month. Employers added the fewest jobs in nine months, and the unemployment rate rose to 9.2%. The economy generated only 18,000 net jobs in June, the Labor Department says. 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. It also raised doubts that the economy will rebound in the second half of the year, having weathered a spring slump. Businesses added just 57,000 jobs last month—the fewest 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. Stock futures plunged after the report’s release. “June’s employment report doesn’t have a single redeeming feature,” says Paul Ashworth, an economist at Capital Economics. “It’s awful from start to finish.” Two years after the recession officially ended, companies are adding fewer workers despite record cash stockpiles and healthy profit margins. Companies have pulled back on hiring after adding an average of 215,000 jobs per month from February through April. 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 hold back on adding workers. High gas prices have cut into consumer spending. And supply-chain disruptions stemming from the Japan crisis have slowed U.S. manufacturing production.
