US unemployment rate falls to 9.5 per cent
The US unemployment rate fell to 9.5 per cent last month, despite the economy shedding 125,000 jobs, the Labour Department said. The unemployment rate was down from 9.7 per cent in May, but jobs were lost for the first time this year. Most analysts had...
The US unemployment rate fell to 9.5 per cent last month, despite the economy shedding 125,000 jobs, the Labour Department said.
The unemployment rate was down from 9.7 per cent in May, but jobs were lost for the first time this year.
Most analysts had expected the ranks of jobless Americans to have swollen beyond 15 million, pushing the unemployment rate from 9.7 per cent to 9.8 per cent.
The headline figure will be some succor for President Barack Obama, who is running out of time to put the economy back on track before Congressional elections in November.
Although the White House has repeatedly warned that unemployment will remain high for the rest of the year, polls show it is still a crucial issue with voters.
But the loss of 125,000 jobs will add to worries that the economic path ahead will be far from smooth.
Yet the drop will offer a smidgen of comfort to markets, which have been convulsed by worry about a double-dip recession in recent weeks.
The last quarter has been tortuous for the top 30 US companies, with the Dow Jones Industrial Average losing more than 10 per cent of its value, in large part over fears about the fate of the US economy.
One reason for continued pessimism will be the further weakness of the private sector, which created a modest 83,000 jobs last month, although that figure was well up from May's downwardly revised total of 33,000 jobs.
Faced with an uncertain outlook and poor access to credit, US firms have been reluctant to rehire workers.
The June figures also showed the evaporation of hiring for the 2010 Census, which accounted for around 95 per cent of new jobs in May.
Census hiring fell back by 225,000.
But the continued weakness has sparked calls for Mr Obama to provide more government spending to restart the recovery.
But proponents of this plan admit it is nearly impossible as Washington zeroes in on elections in which the national debt is also likely to feature prominently.
Congress is currently locked in a bitter debate over extending unemployment insurance for over one million workers and is likely to balk at a wider spending package.