Unemployment Rises Slightly In June

The Labor Department reported July 7 that the jobless rate rose 0.1 percentage point from a 4.4 percent rate in May. The 4.5 percent level matched the unemployment rate in April, with both months representing the highest level the jobless rate has reached in the yearlong economic slowdown.

Businesses slashed payrolls for the second time in three months, cutting 114,000 jobs in June, after a reduction of 165,000 jobs in April. Payrolls had edged up by only 8,000 in May.

The unemployment rate, which is a lagging economic indicator, is expected to continue rising, topping 5 percent by the end of the year. While this jobless rate would still be low by historical standards, it would mark a sharp deterioration from the three-decade low of 3.9 percent hit in several months last year.

Job losses in June were led by a sharp decline of 113,000 jobs in manufacturing, which has suffered 785,000 job losses over the last 12 months, with three-fourths of those losses occurring since January.

For June, the industries suffering the biggest losses were computer-related. Electronic equipment makers cut 31,000 jobs. Industrial machinery makers cut 22,000 positions.

Even the service sector, where most Americans work, was weak in June, managing an increase of only 5,000 jobs, the weakest showing since an outright loss of 15,000 jobs in August 2000.

Much of the weakness was centered in firms providing temporary workers, which suffered a ninth consecutive monthly decline in June. The temporary help industry has lost a total of 379,000 jobs in the last nine months.

The report showed average hours worked remained steady in June at 34.3 hours per week. Workers' wages grew 0.3 percent to $14.29 in June from $14.25 in May.