In June, 467,000 jobs were lost; analysts had predicted 350,000. Despite positive signs for the economy in recent weeks, the report is evidence that the jobs market remains troubled.
Reporting from Washington - The nation's unemployment rate edged up to a 26-year high of 9.5% in June as employers slashed nearly half a million jobs over the month across a wide spectrum of industries, the Labor Department reported today.
The disappointing report dragged down stock markets around the world and provided fresh evidence that the U.S. job outlook remained deeply troubled despite signs in recent weeks that the economy was climbing out of its worst recession since the Great Depression. A separate government report today, for instance, showed that factory orders in May increased by the largest amount in nearly a year.
June's jobless rate rose from 9.4% in May, a much smaller increase than in recent months. But more discouraged workers are dropping out of the labor force because they don't think they can find jobs.
The unemployment rate for men reached 10%. The jobless figure for women was 7.6%. Since the recession began in December 2007, the ranks of the unemployed have doubled to 14.7 million. Of particular concern, the number of long-term unemployed - those out of work for 27 weeks or more - swelled by 433,000 last month to 4.4 million, the report said.
"This is going to be a bigger and bigger social problem going into next year," said David Card, a labor economist at the University of California, Berkeley. The Labor Department's survey of employers showed that nonfarm payrolls tumbled by 467,000 in June. Analysts had expected the economy to lose about 350,000 jobs last month.
Since January, when monthly job losses peaked at 741,000, the pace of payroll cuts had moderated through May, when employment fell by a revised 322,000.
But last month, employers once again ratcheted up the job cuts. Every major sector was down, with the exception of health and education services, which added 34,000 jobs over the month.
The latest report brought the total job loss to 6.5 million since December 2007. That means the economy has erased the entire growth in payrolls in the last nine years, according to the Economic Policy Institute in Washington.
"This is the only recession since the Great Depression to wipe out all the jobs growth from the previous business cycle," said EPI economist Heidi Shierholz.
Manufacturing employment continued to sink, dropping another 136,000 positions, as the battered auto industry and related transportation industry contracted. The construction industry cut 79,000 jobs last month and is now down 1 million jobs from a year ago.
Professional and business services eliminated 118,000 positions last month, retail trade gave up 21,000 jobs, and even government, which had been one of the bright spots in this recession, thinned its rolls by 52,000 as many states, notably California, grapple with a severe budget crisis. The latest report suggested that fresh college graduates will face a grim labor market, and it will be a particularly long, tough slog for unemployed workers. Though their jobless benefits have been extended, in many cases up to a year, there are few signs that employers are hiring. The temporary-help industry, often considered a leading indicator of future hiring, was down 37,600 jobs in June.
Among other worrisome indicators, the average weekly hours of work in June dropped a notch to 33, a record low, reflecting the shortened work hours and furloughs at some companies. Involuntary part-time employment continued to climb. All of which means employers, when they feel confident enough to hire again, will first give more work to existing employees before adding new staff.
The Obama administration has been trying to help workers by increasing funding for unemployment benefits and job training, on top of its massive economic stimulus spending to spur economic and job growth. Still, economists widely expect the jobless rate to reach double digits later this year and stay high well into next year, even as economic growth turns positive later this year.
