June Jobs Increase Falls Short
NEW YORK (TheStreet) -- The lackluster number of new jobs created last month stunned economists and scaled back market expectations for an improving jobs picture.
The Bureau of Labor reported that the economy added just 18,000 new jobs in June, while the unemployment rate inched up to 9.2%. The essentially unchanged number of jobs was a big disappointment given that consensus estimate predicted a 125,000 increase, according to Briefing.com. The market was expecting unemployment to stick at 9.1%.
Many economists had ratcheted up their estimates after a favorable report from Automatic Data Processing Thursday. ADP reported that private payrolls rose by 157,000 in June, more than double the increase the market was expecting.
The number of jobs in private sector remained about the same, with a gain of just 57,000 jobs. That's fewer than May's gain of 83,000 jobs. The number of hours that American worked per week was also about unchanged.The market was looking forward to an improving jobs picture after May had added 25,000 new jobs. Yesterday's indexes rallied after initial jobless claims declined and private payrolls improved more than expected. Instead, U.S. equity futures reversed yesterday's stock gains, with oil prices falling about 2%. Despite the bleak jobs picture, John Canally, economist at LPL Financial, was still hopeful of seeing better job numbers come July. "If you're a bear, you're going to pounce all over these numbers." However, Canally noted that the report was a "half empty, half full" picture. Although jobs in state and local governments dropped, retail and leisure sectors saw strong gains, Canally explained. He also added that the drop in manufacturing hours worked might be a bit "fluky" given that ISM's reading on manufacturing was much better last week. Canally said that as repercussions from Japan's earthquake disaster ease further, the auto industry will see improvements that will in turn help jobs bounce back. "It's not quite as awful as it looks here," said Canally. -- Written by Chao Deng in New York. >To contact the writer of this article, click here: Chao Deng. >To follow the writer on Twitter, go to: @chao_deng >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV