The U.S. economy generated a scant 6,000 new jobs in July, the Labor Department said on today in a report likely to fan fears growth is at risk of stalling after a weak spring quarter.
July's job total came in far below Wall Street economists' expectations for a 69,000-job rise while the unemployment rate was unchanged from the June level at 5.9 per cent.
The June jobs gain was revised up to 66,000 from the 36,000 reported a month ago and left an overall impression of lackluster job markets.
The average workweek declined to 34 hours last month from 34.3 in June -- the lowest since a matching number last October following the shock of Sept. 11 attacks. Factory overtime fell to an average 4.1 hours in July from 4.3 a month earlier.
The closely watched report is likely to raise warning lights at the Federal Reserve, economists said. Policymakers there next meet to mull interest rates on Aug. 13. The figures imply companies are keeping a tight rein on staffing levels as they monitor whether or not economic growth will pick up after a bare 1.1 percent annual rate of expansion in national economic output during the second quarter.
Analysts noted that the upward revision in June jobs was encouraging but said the data overall were likely to reinforce worry about the economy's recovery. Revised data issued by the Commerce Department earlier this week showed GDP contracted for nine months at the beginning of 2001 and grew more slowly in the early part of this year than initially thought.
Jim Herrick, head of equity trading for Robert W. Baird & Co., said the latest news on top of weak manufacturing data for July was likely to weigh on stock prices.
The July employment report showed 86,000 people dropped out of the civilian workforce. A shrinking labor pool can help keep the unemployment rate from rising but may also imply that some people are simply too discouraged to keep looking for work.
Bond prices were modestly higher in the wake of the unemployment report, apparently on the belief it means the Fed is likely to keep interest rates on hold for some time to give the economy room to regain its footing.