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June's U.S. jobs report released today (Friday) deflated the brief celebratory mood that followed Thursday's upbeat employment data, and ended a second quarter packed with weak economic figures.
The U.S. Labor Department reported Friday that employers added a skimpy 80,000 jobs in June, much less than analysts' estimates of 100,000-125,000. The jobless rate remains at an elevated 8.2%.
The fresh data concludes a dismal second quarter.
In the first quarter of 2012, the average number of monthly jobs created was 226,000. In the second quarter that average fell to a measly 75,000. While job gains in April and May deviated little from estimates, June's data was significantly lower than anticipated.
"Today's report is the rotten cherry atop the half-baked economic news of the last few months," TD Bank's Chris Jones said in a note.
Roughly one-third of the jobs added in June were in temporary services. Manufacturing added 11,000, marking its ninth straight month of gains, while growth in factory jobs dropped off sharply in the second quarter. Healthcare jobs grew by 13,000 and financial services added 5,000. Meanwhile, retailers, transportation firms, and the government slashed jobs.
Friday's lackluster report came on the heels of some encouraging data.
On Thursday, ADP's employment report showed that private employers added 176,000 jobs in June — far exceeding economists' expectations of 95,000. Small businesses and service firms were responsible for most of the gains.
Another optimistic sign Thursday was the decline in the number of first-time applicants for jobless benefits. First-time claims dipped by 14,000 to 373,000, while the four-week average slid by 1,500 to 385,000.
Any optimism had faded Friday after the U.S. jobs report came out. The Dow Jones was down more than 180 points by noon.
Political Implication of Jobs Report
The gloomy report will definitely weigh on President Barack Obama's re-election efforts as he hits the 2012 campaign trail Friday, attempting to win over working-class voters in Ohio and Pennsylvania.
In June, President Obama was criticized for the worst jobs report in a year, and Friday's report wasn't much better. In fact, over the past three and a half years, the unemployment rate has remained above an unhealthy 8%.
The data is fodder for Republican criticism.
House Speaker John Boehner, R-OH, said, "Today's job report shows the private sector isn't "doing fine' and that President Obama's policies have failed."
A weak job market has made consumers, business owners and lenders less confident, causing them to put the reins on spending, hiring and credit. And the looming implications of Obamacare, Taxmageddon and the fiscal cliff have increased uncertainty and weighed on job growth.
Any Fix to the Jobs Situation?
While President Obama has done little to goose the job market, June's ominous figures could push the Federal Reserve to move sooner rather than later to prop up the economy. Some 13 million Americans are currently unemployed.
"This economy has no forward momentum and little help from monetary or fiscal policy," Kathy Bostjancic, director of macroeconomics analysis for the Conference Board, told The New York Times.
Bostjancic added that "ill winds from Europe" and U.S. lawmakers who are dragging their feet over what to do about the looming fiscal cliff have together created an unfriendly environment for hiring.
The economy needs 125,000 jobs added every month just to keep up with population growth, but companies aren't eager to add to their payrolls ahead of these policy changes.
"A lot of companies are not too clear about how all these policy issues are going to affect their bottom line," Sophia Koropeckyj, managing director at Moody's Analytics, told The New York Times. "Ultimately, demand determines what companies are going to do in the longer run in terms of hiring. But in the short run, companies are going to try to hold off as much hiring as long as possible."
June's puny U.S. jobs report has many scratching their heads, sparking speculation that the economic recovery enjoyed during the first three months of 2012 is not simply stalling, but reversing. Economists expect the tepid trend in jobs creation to last through the rest of the year.
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