62,000 jobs cut in June; more losses predicted
The first-half employment report was worst since '01.
WASHINGTON - The nation's job market stumbled badly through the first half of 2008, government figures released yesterday showed, and analysts said it was likely to keep faltering through the rest of the year.
Payroll jobs fell 62,000 in June, the sixth straight month of losses, the Labor Department report showed.
"More job losses are coming through the remainder of the year," said Mark Zandi, chief economist for forecaster Moody's Economy. com in West Chester, Pa. "The economy has lost just over 400,000 jobs since the start of the year and will lose another 400,000 by year's end. Behind this pessimism are the broad-based job declines across most industries and regions of the country."
The first-half loss in jobs was the worst since 2001, when the nation was in the midst of a recession. The economy needs to generate more than 100,000 jobs a month for employment to remain stable.
"The deteriorating jobs climate will dampen many a barbecue this weekend. It's hard to celebrate when you are out of a job," said Richard Yamarone, economist at Argus Research Corp.
The department said the unemployment rate stayed at 5.5 percent in June despite the drop in jobs. Still, that confirmed that May's unusual jump in the jobless rate of half a percentage point was not an aberration.
"We had thought that the rate had temporarily overshot in May based on problems seasonally adjusting the summer inflow of students into the workforce," Nigel Gault, the chief U.S. economist for forecaster Global Insight Inc., of Lexington, Mass., said in a research note to investors. "But the unemployment rate for young workers was little changed this month, suggesting that they are simply facing a much weaker labor market than in previous years."
June's jobless rate was considerably higher than the 4.6 percent of a year ago.
The manufacturing, construction, financial and retail sectors led the job losers, while government and health care continued to add jobs. This is a continuing pattern.
"Job losses are occurring in over half the nation's states, with large declines in big states such as California, Florida, Michigan and Ohio," Zandi said. "There is nothing in today's jobs report that suggests the job market will stabilize anytime soon."
In Pennsylvania, 4,400 jobs were lost in the five months through May, yesterday's report said. The job loss in New Jersey was 10,900. The state figures are one month behind the national figures.
Although June's employment losses were slightly worse than expected, they were below the number associated with economic recessions.
"We don't like to see jobs lost," Commerce Secretary Carlos Gutierrez said in an interview. "It is important, however, to put it in perspective. During the mild recession of 2001, we were losing 180,000 [jobs] per month."
Other economic news yesterday revealed more weak spots.
The number of newly laid-off people filing for unemployment benefits rose sharply last week. New applications jumped 16,000 to 404,000, the highest since late March.
The nation's service sector - generally an engine for the economy - contracted in June. The Institute for Supply Management's index of the service sector fell to 48.2 in June from 51.7 in May. A reading below 50 signals activity is shrinking, while a reading above that suggests activity is expanding.