Joseph Bonney | Jul 08, 2011 10:15AM EDT
U.S. employers last month hired the fewest workers in nine months, surprising analysts who had forecast stronger employment growth and raising pessimism about the economy’s direction in the rest of 2011.
In June, there was an increase of only 18,000 nonfarm payrolls, the Labor Department reported. A stronger-than-expected report from payrolls processor ADP had led many economists to raise their forecasts. Bloomberg News said its survey of economists produced a consensus forecast of 105,000 new jobs.
The unemployment rate rose to 9.2 percent, the highest since December, from 9.1 percent in May.
The private sector added 57,000 jobs but much of that increase was offset by a 39,000 reduction in government employment, mostly due to fiscal problems and cutbacks at state and local governments.
The government revised April and May payrolls to show 44,000 fewer jobs created than previously reported.
Friday’s jobs report intensifies debate over whether the economy is in a temporary lull resulting from higher commodity prices and supply chain disruptions following the Japan earthquake in March, or whether the weakness will persist.
Lakshman Achuthan, co-founder and managing director of the New York-based Economic Cycle Research Institute, has said ECRI data point to a “pronounced, pervasive and persistent” growth slowdown that “is going to stick around for a couple of quarters, maybe more.”
ECRI’s Weekly Leading Index, which forecasts growth several months ahead, turned downward earlier this year. The index includes data from The Journal of Commerce-ECRI industrial Price Index, which measures prices for commodities used in industrial production.
The Industrial Price Index for the week of July 1 slipped to its lowest level since Jan. 7. The index’s growth rate slowed to its lowest pace since July 23, 2010.
The economic uncertainty comes as companies prepare for the annual summer-fall peak season for holiday imports.
The Global Port Tracker, produced by the National Retail Federation and Hackett Associates, expects containerized imports to remain flat this month before rising sharply when the peak season kicks in.
Journal of Commerce Economist Mario O. Moreno has forecast 4.9 percent growth in containerized imports this year. Imports were up 7.2 percent through the first five months of the year.
-- Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @josephbonney.
