US News

Unemployment rises to 9.2 percent as hiring stalls

WASHINGTON — The US economy added jobs at a slower pace in June than in May, the Labor Department reported Friday, suggesting that the sudden slowdown in the economy might be longer-lasting and more severe than feared.

Nonfarm payrolls rose by only 18,000 in June, well below the 125,000 gain expected by economists surveyed by MarketWatch.

Job gains in May were revised down to 25,000 from the initial estimate of 54,000.

Employment growth almost ground to a halt in the last two months after several months of strong gains. Employment rose by an average of 215,000 per month from February through April — but only averaged 22,000 over the past two months.

The unemployment rate ticked higher to 9.2 percent in June from 9.1 percent in the previous month, reaching the highest level since December 2010. Economists expected the unemployment rate to remain steady.

The jobless rate has risen steadily from 8.8 percent in March.

President Barack Obama was set to deliver a statement on the monthly jobs report at 10:35am Eastern Time in the White House Rose Garden.

The report could raise fears of a double-dip recession, and the market showed those concerns, with S&P 500 futures turning south by more than one percent. The dollar fell against the Japanese yen, and the yield on the 10-year Treasury bond fell eight basis points to 3.06 percent.

Though a private-payrolls report from ADP yielded a much different result Thursday, Friday’s report from the Labor Department provided no evidence that the slowdown in job growth was temporary.

The slowdown came as a surprise to economists, who, prior to the report, expected a pickup in growth in the second half of the year. Federal Reserve officials recently forecast a 3.5 percent growth rate over the next 18 months.

The weak report creates a conundrum for the central bank. Last month, the Fed ended its $600 billion bond-buying program despite signs of a slowdown and said that no new easing was needed.

To read more, go to MarketWatch.