The labor market weakened further in June, as
fell by 114,000, according to this morning's
. However, the
rose to just 4.5% from 4.4%; economists had expected the jobless rate to rise to 4.6%.
Economists polled by
were looking for a drop of 44,000 in payrolls but in the days before the report, some expected the job losses would be much worse, as they were. However, there's fleeting hope that this report will be the worst of it this year, and subsequent releases will show the rate of job loss slowing.
The labor market has softened in the last several months, after the unemployment rate hit a 30-year low of 3.9% late last year. In response to rising costs and falling profits, companies have cut back the rolls and laid off workers. Weakness in the job market is expected for the duration of the year.
The deterioration in the labor market is evident in the shrinking percentage of people voluntarily leaving jobs. As of June, 12.5% of the unemployed were leaving jobs voluntarily, down from 13.1% in May. That figure hit an all-time high of 14.7% in October, when the job market was much tighter and workers felt more confident in their job prospects. Job prospects have declined significantly in recent months, with the percentage of people believing jobs are hard to find growing each month, according to recent consumer confidence
Average hourly earnings
, as expected, were up 0.3%, increasing to $14.29 from $14.25 in May. The
was unchanged at 34.3 hours.
Losses were present in a number of industries in June. Manufacturing once again was hit hardest, losing 113,000 after a drop of 127,000 in May. On average, the manufacturing sector employed 300,000 fewer people in the second quarter than in the first quarter. The largest declines in June were in the electronic equipment and industrial metals industries, owing to weak demand and lack of pricing power.
The service sector was one of the few sectors showing a gain, adding 5,000 to the payrolls after a gain of 97,000 in May. The June figure was the smallest growth in the service sector since August 2000. Transportation jobs were down 11,000 in June, because of diminished shipping demand. Wholesale trade lost 15,000 and construction jobs declined by 7,000.