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U.S. employers cut jobs for sixth straight month: unemployment rate 5.5 per cent

Thu Jul 3, 10:25 AM
Jeannine Aversa, The Associated Press

WASHINGTON - U.S. employers cut payrolls by 62,000 in June, the sixth straight month of nationwide job losses, underscoring the economy\'s fragile state. The unemployment rate held steady at 5.5 per cent.

The latest snapshot of business conditions, released by the U.S. Labor Department on Thursday, showed continued caution on the part of employers who are chafing under high energy prices and are uncertain about how long the economy will be stuck in a sluggish mode, reflecting fallout from housing, credit and financial troubles.

Heavy job losses in construction, manufacturing and financial services, along with cuts in retailing, eclipsed job gains in education and health services, leisure and hospitality, and government.

The report, however weak, was largely on target with economists\' forecasts. They had been expecting employers to reduce payrolls by around 60,000 jobs in June and for the unemployment rate to slip a notch to 5.4 per cent.

The jobless rate spiked to 5.5 per cent in May. That marked the biggest over-the-month increase in two decades and left the rate at its highest since October 2004.

Job losses in both April and May turned out to be considerably deeper than had been thought. Payrolls dropped by 67,000 in April, versus the 28,000 previously reported. And, losses in May came to 62,000, rather than the 49,000 initially estimated.

So far this year, the U.S. economy has lost a total of 438,00 jobs, an average of 73,000 a month.