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US Job Growth Plummets to 18,000 in June

The US economy only generated 18,000 new jobs in June, far below expectations and pushing the unemployment rate up to 9.2%. Private sector job growth also slowed, adding only 57,000 positions compared to 241,000 in April. Many businesses have been hesitant to expand their workforces despite accumulating cash reserves. The weak jobs report caused US stock markets to plunge and may push the Federal Reserve to implement further stimulus measures to boost the slowing economy.

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12 views2 pages

US Job Growth Plummets to 18,000 in June

The US economy only generated 18,000 new jobs in June, far below expectations and pushing the unemployment rate up to 9.2%. Private sector job growth also slowed, adding only 57,000 positions compared to 241,000 in April. Many businesses have been hesitant to expand their workforces despite accumulating cash reserves. The weak jobs report caused US stock markets to plunge and may push the Federal Reserve to implement further stimulus measures to boost the slowing economy.

Uploaded by

sabrinamalek
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd

BUSINESS NEWS US new jobs plunge in June, jobless rate hits 9.

2% Posted: 08 July 2011 2050 hrs WASHINGTON: The US economy generated a paltry 18,000 jobs in June, sharply lower than expected and a strong sign of stalling in the growth of the world's largest economy. The fall in new jobs pushed the overall unemployment rate up to 9.2 per cent, adding to the challenges facing Barack Obama's administration as it begins looking to next year's presidential elections. The private sector, expected to power up the economic recovery, added just 57,000 positions -- compared to 241,000 in April. Offsetting that was a loss of 39,000 government jobs as authorities in federal, state and local administrations slash payrolls to address budget deficits. The department also revised downward by more than half its already-disappointing data for May -- only a net 25,000 jobs were generated. Added together, the two months paint a picture of both extremely slow growth in the economy and reticence of businesses, many of which have been piling up cash reserves, to expand their workforces. US stock markets plunged on opening, wiping out gains made Thursday on the back of preliminary, private-sector data that suggested a much brighter jobs picture. The Dow Jones Industrial Average fell 0.85 per cent in the first 20 minutes of trade after the news. The White House said the data represents a "call to action" to boost growth. "This reiterates what we knew... the growth rate slowed down" in the first half of the year, White House economic advisor Austan Goolsbee told CNBC television. Nearly all of the new jobs came from the service sector -- and those predominantly in health care -- despite hopes of a revival in US manufacturing. In an additional sign of the challenges to growth, the average workweek declined; average hourly earnings declined; and the proportion of the population working all fell as well in the month.

Though the drops in all three were slight, taken against rising prices it suggested US consumers' buying power fell in the month. Domestic consumption is by far the largest driver of the economy. "We can see no silver lining in this employment report, which is weak, weak, weak," said John Ryding and Conrad DeQuadros at RDQ economics. "We do not believe that the economy will drop back into recession... but this report suggests that underlying growth in the economy is probably only around two percent," they said. Economists speculated that the report could push the Federal Reserve to seek new measures to stimulate the economy, after the US central bank's US$600 billion "quantitative easing" liquidity-boosting policy wrapped up at the end of June. "With only 18,000 jobs created in June, the Federal Reserve will be asking whether stimulus measures to date have been enough," said Manoj Ladwa of ETX Capital in London.

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