U.S. Economy Sheds 125,000 Jobs

WASHINGTON ( TheStreet) -- The nation's employers shed 125,000 jobs from nonfarm payrolls last month, according to a Labor Department report released Friday, marking the first broad monthly jobs loss of the year and verifying sluggishness felt in the hiring market. But the report offers both bulls and bears numerous talking points.

Most clearly, the bulk of the payroll drop in June was caused by sharp a loss in temporary census positions, which fell by 225,000. Private sector employment -- which was more closely watched this month compared with the headline figure -- increased by a mildly disappointing 83,000 jobs. That's still the sixth-straight month of private sector growth and bettered the underwhelming tally offered by Automatic Data Processing ( ADP) which said private sector payrolls rose by 13,000.

And because a number of people dropped out of the work force last month, the nation's unemployment rate fell to 9.5% from 9.7% in May. Despite the cause, the rate still fell to its lowest level since June 2009. The nation's broader U-6 underemployment rate measure, which includes part-timers who prefer a full-time schedule along with those who stopped searching, ticked just lower to 16.5% from 16.6%. The total number of unemployed now stands at 14.6 million, according to the report.

A consensus of Wall Street economists provided by Briefing.com were looking for total payrolls to fall by 100,000, though the rate was expected to edge higher to 9.8%.

The government also revised gains made over the prior two months slightly higher. After originally reporting a gain of 290,000 jobs in April, the Labor Department now says employers added 313,000 positions. The government also added another 2,000 positions to payrolls in May, bringing its revised gain to 433,000.

Within the major industries, temporary help payrolls increased by 21,000. Strength could also be found in transportation and warehousing positions, leisure and hospitality employment, and the health care sector. The manufacturing sector, which has been a source of strength during the economic recovery, also added another 9,000 jobs to its payrolls. Still, the construction realm fell by 22,000 and retail employers shed 6,600 positions. Financial services also saw their payrolls dwindle by 15,000 in June.

Employees' average hourly earnings fell by 2 cents, or 0.1%, to $22.53, and the average work week also edged lower by a tenth of an hour to 34.1 hours.

Several firms continued announcing layoffs in June, including Northrop Grumman ( NOC), RealNetworks ( RNWK), Graphic Packaging ( GPK) and Borders ( BGP).

--Written by Sung Moss in New York

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