–Retransmitting Story Headlined 8:30 ET Friday
–June Payrolls +18,000; Unemp Rate Up a Tenth to 9.2% (9.182%)
–‘Big Swing’ Over the Past Five Months

By Denny Gulino

WASHINGTON (MNI) – The new unemployment numbers defied
expectations, underlining the slowdown instead of signaling an uptick,
as vacation jobs outdistanced the other major categories and government
jobs losses took a bigger bite.

The Bureau of Labor Statistics Friday reported only 18,000 payroll
slots were created in June while April and May’s results were revised
lower and the unemployment rate rose another tenth, to 9.2%. Without
seasonal adjustment, there were 376,000 jobs actually created.

“It was a weak month,” the BLS chief of the employment section, Tom
Nardone, told Market News International as the report was about to be
published. “May was revised even weaker, only 25,000 now,” he added.
“There’s been a big swing over the course of the past five months.”

With June the second anniversary of the turnaround to recovery and
jobs creation, as calibrated by the National Bureau of Economic
Research, pre-recession level jobs not yet added back totaled 6.98
million, Nardone said.

April’s revision cut 15,000 previously reported jobs, yet still
showed 217,000 new ones. Then came along a weak May, made 29,000 jobs
weaker in the June revision.

February through April had averaged 215,000 jobs a month and now
May and June have averaged only 22,000, a result not anticipated by the
forecasters who had moved their estimate up Thursday on the basis of the
ADP miss, at 157,000.

Private sector employment rose 57,000 in June after May’s increase
of 73,000. But government’s losses cut deeper in June than in May, at
39,000 jobs which now included the federal government’s 14,000-job loss.

The June report “really didn’t have any big movements one way or
the other” in major categories,” Nardone said.

Mining rose 8,000, a good performance for a small slice of total
employment. Manufacturing posted a 6,000 net increase, with durables up
15,000 and non-durables down 9,000. Transportation rose 4,000. Typical
sources of strength, health care and professional business services,
weren’t up to it in June, with health care up only 14,000 and the
business services category up just 12,000. Within services, temporary
help was a “very small positive,” he said, and for this year so far, is
“pretty much flat.”

Leisure and hospitality, however, turned in the month’s most
impressive gains, up 34,000, nearly offsetting the government jobs
losses.

But construction was down another 9,000. Financial activities
dropped 15,000. Private education lost 17,000 in the seasonally adjusted
figures.

Total hours slipped a tenth and manufacturing hours lost three
tenths of an hour in June.

Earnings were steady, still up 1,9% over the year through June,
about where they have been all year.

The unemployment rate’s increase, now 0.4 point above where it was
in March, has not been due to labor force expansion. Based on the
accompanying survey of households, the rate is still a little lower than
the 9.5% of a year earlier, and the 9.8% in November.

The household survey showed employment down 445,000 and a decline
in the employment-population ratio to 58.2, “the low end of the range”
it’s been in over a year, Nardone said, but not going below its lowest
recent level.

“You know, overall, payrolls employment has been essentially flat
for the second month,” he said, while in the household survey, the labor
participation rate has slipped a tenth to 64.1 in June after being 64.2%
the first five months of the year.

The broader measure of unemployment, dubbed U-6 by the BLS,
includes people only marginally attached to the labor force and it rose
four tenths in June, to 16.2%.

The number of people unemployed for 27 weeks or longer was about
unchanged but the number of newly unemployed, for less than five weeks,
increased by 412,000 to 6.3 million in June, 44.4% of all the
unemployed. “We independently seasonally adjust these things, so
sometimes the parts move differently than the total,” he said, and in
June, “the total (unemployed) didn’t move that much.”

Expectations in a Market News International survey centered on a
gain of 105,000 payroll slots for June, with an unemployment rate edging
back down to 9.0%.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: MAUDS$,M$U$$$]