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US loses 62,000 jobs during June | |
(40 minutes later) | |
US firms cut workers for a sixth month in June, official figures show, stoking fears that the world's largest economy was heading towards a recession. | US firms cut workers for a sixth month in June, official figures show, stoking fears that the world's largest economy was heading towards a recession. |
The economy lost 62,000 non-farm payrolls in June, the Labor Department said. It follows a newly revised figure of 62,000 jobs also lost in May. | |
Despite the reduction in payrolls, the unemployment rate was steady at 5.5%. | Despite the reduction in payrolls, the unemployment rate was steady at 5.5%. |
US companies have been reluctant to add staff amid higher oil and food prices, and slowing economic growth. | |
Gary Thayer of Wachovia Securities said that the payroll figures showed that the labour market was still very soft. | Gary Thayer of Wachovia Securities said that the payroll figures showed that the labour market was still very soft. |
"We're not seeing dramatic job cuts, but clearly companies are trying to hold the line on costs," he said. | "We're not seeing dramatic job cuts, but clearly companies are trying to hold the line on costs," he said. |
"It suggests that it's still a rough economy." | "It suggests that it's still a rough economy." |
The US economy has shed jobs at an average rate of 73,000 a month, marking a total of 438,000 job losses so far this year. | |
Some economists are already predicting the unemployment rate will climb to 6% or higher in early 2009. | |
'Hard landing' | 'Hard landing' |
The majority of job losses in June came in the construction, financial services and manufacturing areas though retailers also shaved staff numbers. | |
These losses overshadowed the gains seen by the health service, education and leisure and hospitality and government sectors. | |
Consumer spending accounts for two-thirds of US economic activity and companies are worried that consumers are continuing to tighten their belts amid spiralling food costs and fuel costs. | Consumer spending accounts for two-thirds of US economic activity and companies are worried that consumers are continuing to tighten their belts amid spiralling food costs and fuel costs. |
On Thursday, the price of oil powered to a new record, hitting a fresh peak of $146.34 a barrel. | On Thursday, the price of oil powered to a new record, hitting a fresh peak of $146.34 a barrel. |
The economy is at risk of a hard landing Brian Bethune,Global Insight | The economy is at risk of a hard landing Brian Bethune,Global Insight |
Many analysts are predicting that these factors will continue to dampen consumer demand and have a negative impact corporate profits. | Many analysts are predicting that these factors will continue to dampen consumer demand and have a negative impact corporate profits. |
At the same time, there is growing evidence that US firms are seeing a decline in demand for their services and goods. | At the same time, there is growing evidence that US firms are seeing a decline in demand for their services and goods. |
On Wednesday, figures showed that factory orders climbed by the smallest amount for three months during May. | On Wednesday, figures showed that factory orders climbed by the smallest amount for three months during May. |
According to the Commerce Department, factory orders rose 0.6% in May, less than half the increase seen in April and March. | According to the Commerce Department, factory orders rose 0.6% in May, less than half the increase seen in April and March. |
Without the support of transportation orders, which rose 2.5% on the back of rising orders for aircraft, the fall in orders would have been more dramatic. Excluding transportation orders, factory orders rose by 0.4%. | Without the support of transportation orders, which rose 2.5% on the back of rising orders for aircraft, the fall in orders would have been more dramatic. Excluding transportation orders, factory orders rose by 0.4%. |
"The economy is at risk of a hard landing," said Brian Bethune of Global Insight. | "The economy is at risk of a hard landing," said Brian Bethune of Global Insight. |
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