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.
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