Unemployment rises to 9.2% amid weak June job gains

Payrolls rose by only 18,000, the weakest reading since September, the Labor Department says. The number is far below economists' expectations.

A job seeker looks at a bulletin board at an employment center in Richardson, Texas. (LM Otero, Associated Press / July 5, 2011)

Reuters

WASHINGTON—

U.S. employment growth ground to a halt in June, with employers hiring the lowest number of workers in nine months, dampening hopes the economy was on the cusp of regaining momentum after stumbling in recent months.

Nonfarm payrolls rose only 18,000, the weakest reading since September, the Labor Department said on Friday, well below economists' expectations for a 90,000 rise.

Many economists raised their forecasts Thursday after a stronger-than-expected reading on U.S. private hiring from payrolls processor ADP, and they expected gains of anywhere between 125,000 and 175,000.

The unemployment rate climbed to 9.2 percent, the highest since December, from 9.1 percent in May.

The government revised April and May payrolls to show 44,000 fewer jobs created than previously reported. The report shattered expectations that the economy was starting to accelerate after a soft patch in the first half of the year.

The private sector added 57,000, accounting for all the jobs created, with government employment shrinking 39,000 because of fiscal problems at local and state governments.

Economic activity in the first six months of the year was dampened by rising commodity prices and supply chain disruptions following Japan's devastating earthquake in March.

Signs the labor market is struggling is a major blow for the Obama administration, which has struggled to get the economy to create enough jobs to absorb the 14.1 million unemployed Americans.