July 6, 2012 -- Employers added 80,000 jobs in June and the unemployment rate remained unchanged at 8.2 percent, the Labor Department announced Friday, in another so-so report on the U.S. economy that promises to frame the debate for the fall presidential election.
Economists had expected that employers added around 90,000 jobs in June, higher than the revised 77,000 jobs added in May, but lower than what is needed for a full economic recovery.
It's another disappointing economic report as the economy continues to struggle to put up the kind of job creation numbers and GDP growth seen before the recession that began in 2007-2008.
"From an employment perspective, the slow rate of job creation is bad news not only for job seekers but also for current employees," said Mark Royal, senior principal in Hay Group's employee research division. "In light of the weak labor market, turnover rates have remained low in many U.S. companies, leaving many employees who would like to move on stuck in place. And, with fewer new positions available and fewer incumbents leaving existing jobs, advancement opportunities are constrained for those employees wanting to remain with their employers."
Concerns about the election, the fiscal cliff and Europe may be dampening new hiring to some extent, said Scott Brown, chief economist with Raymond James. But he added that the report has some positives. "Hours advanced, average weekly earnings are now outpacing inflation, reflecting an increase in purchasing power (consistent with the theme that lower gasoline prices will help support consumer spending over the next few months). All in all, the report is consistent with moderate economic growth in the near term."
If the economy were at full employment, "this would be fine, but we still have a lot of ground to make up (in the labor market) from the downturn," he added.
With an unemployment rate of 8.2 percent and 12.7 million unemployed persons in the country, said Brown, who notes that 125,000 to 130,000 added jobs are needed just to absorb the growth from the working-age population.
But the jobless numbers really don't tell the whole picture. The offical jobless rate doesn't count 88 million people who have either given up looking for work or who have retired when they would rather be working but can't find a job. And the labor participation rate has steady declined since the rececession, a full 2.3 percentage points to 63.8 percent, a decline that hasn't been seen since the early 1980s.
Before the jobs report, there two pieces of positive employment data this week.
Private payroll tracker, ADP, reported on Thursday that the U.S. added 176,000 private jobs in June, more than expected, following a revised 136,000 jobs added in May.
The number of people seeking U.S. unemployment benefits dropped last week to the lowest level in six weeks, falling 14,000 to 374,000 seasonally adjusted.
Brown expected around 100,000 nonfarm payroll jobs and 115,000 private payroll jobs, seasonally adjusted, were added in June.
"I think the 'softer' payroll gains we saw in April and May reflected a payback from an unusually mild winter, which pulled forward job gains that would have normally showed up in the spring," Brown said.
Brown expected payroll growth in June to be "somewhat better, but not especially strong" though the jobs report for June often has "uncertainty" because of the end of the school year and the influx of summer jobs.
This morning, the Bureau of Labor Statistics reported both seasonally adjusted and non-seasonally adjusted unemployment figures, accounting for temporary summer jobs.
Jobs with state and local governments were expected to be a trouble spot. Brown expected a decline of 15,000 for government jobs in June.
"Strains in state and local government budgets have led to continued job losses, although the pace of decline appears to have slowed relative to last year," he said.