WASHINGTON (AP) – Hiring slowed to a near-standstill last month, raising doubts that the economy will rebound in the second half of the year after a spring slump.
The economy generated only 18,000 net jobs in June, the fewest in nine months. The unemployment rate rose to 9.2 percent, the highest rate of the year, the Labor Department said Friday.
“June’s employment report doesn’t have a single redeeming feature,” said Paul Ashworth, an economist at Capital Economics. “It’s awful from start to finish.”
Two years after the recession officially ended, companies are adding fewer workers despite record cash stockpiles and healthy profit margins.
Businesses added just 57,000 jobs last month – the fewest in more than a year. Governments cut 39,000 jobs. Over the past eight months, federal, state and local governments have cut a combined 238,000 positions.
It was the second straight month of feeble job growth. The number of jobs added in May was downwardly revised to 25,000.
Companies have pulled back on hiring after adding an average of 215,000 jobs per month from February through April. The economy typically needs to add 125,000 jobs per month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate.
“Our economy as a whole just isn’t producing nearly enough jobs for everybody who is looking,” said President Barack Obama, during a speech in the Rose Garden.
Obama used the dismal job data to press Congress to raise the government’s borrowing limit. He also said Congress could help the economy by passing three free trade agreements, approving government projects that would create jobs for construction workers, and extending a payroll tax cut.
But Republicans have said they will not support an increase in the $14.3 trillion borrowing limit without an equal cut in spending. They also oppose raising taxes as part of any deal. If the limit isn’t raised by Aug. 2, the nation will default on its debts, the Treasury Department says.
“These numbers serve as a warning that as we address the debt limit increase we shouldn’t do so in a way that raises taxes and impedes the ability of small businesses to create jobs,” said House Majority Leader Eric Cantor, a Republican from Virginia.
Economists have said that temporary factors, in part, have forced some employers to scale back hiring plans. High gas prices have cut into consumer spending, which fuels 70 percent of economic activity. And supply-chain disruptions stemming from the Japan crisis have slowed US manufacturing production.