Unemployment rate unchanged
NEW YORK (CNNMoney) — Hiring was lukewarm last month, with employers adding jobs but not enough to bring the unemployment rate down.
The economy added 80,000 jobs in June, the Labor Department reported Friday, barely an improvement from the 77,000 jobs added in May. The unemployment rate remained at 8.2%.
Economists surveyed by CNNMoney had expected to see employers add 95,000 jobs and the unemployment rate to remain unchanged.
The labor market has been volatile this year, with job growth starting off strong in the first couple months of 2012. Then a disappointing slowdown in the spring led many to wonder whether the recovery was taking a turn for the worse.
Economists have attributed the strong hiring in the winter to unusually warm weather. Now they say fears about Europe’s debt crisis, China’s slowdown and fiscal cliff looming in the United States are holding employers back.
“It’s hard for an employer to hire somebody when you don’t know what the tax rates are going to be in six months. There’s just too much uncertainty,” said John Silvia, Wells Fargo chief economist.
June’s weak growth added to fears that the recovery is waning. The economy needs at least 125,000 jobs added each month just to keep up with population growth. It needs even more to bring the unemployment rate down.
“Today’s report is the rotten cherry atop the half-baked economic news of the last few months,” Chris Jones, economist with TD Bank said in a note.
Revisions from previous months also showed the economy gained 1,000 fewer jobs in April and May than originally thought.
Among the sectors adding jobs, manufacturers hired 14,000 workers, professional and business services added 47,000 jobs, and restaurants and bars added 15,100 jobs.
Meanwhile, retailers slashed 5,400 jobs and the government cut 4,000 jobs.
Workers with a bachelor’s degree or higher had a 4.1% unemployment rate, whereas workers with just a high school degree had an 8.4% rate.
“We continue to hear from companies that it’s a two-tier labor market,” said Brian Kropp, managing director at the Corporate Executive Board. “For people who have been employed with professional and technical skills, it’s a decent job market. But for the rest of the workforce it’s still very difficult.”
Overall, the job market has a long way to go to climb out of the deep hole left by the financial crisis. Of the 8.8 million jobs lost, only about 3.8 million have been added back.
Roughly 12.7 million Americans remain unemployed, and 41.9% of them have been so for six months or more.
The so-called underemployment rate rose to 14.9% in June. That rate includes the unemployed as well as people who could only get part-time positions and who have looked for a job at some point in the past year.