US jobless rate up as growth stalls

WASHINGTON (AFP) - US unemployment climbed to 9.2 percent as job creation stalled in June, official figures showed Friday, posing new challenges to the Obama administration’s efforts to rev up economic growth.
Job creation was near-stagnant for the second month in a row, Labor Department data showed, leaving 14.1 million Americans still jobless two years after the 2008-2009 recession ended. The data was uniformly seen as bad news for the government of President Barack Obama as Republican opponents challenge his economic record heading into the national elections next year.
But it also came as the White House and Congressional leaders were locked in talks on slashing government spending, necessary to close a yawning deficit but which economists say could further curtail growth if too precipitous.
“Today’s jobs report confirms what most Americans already know: we still have a long way to go,” Obama said after the jobs figures came out. “Our economy as a whole just isn’t producing nearly enough jobs for everybody who’s looking,” he said.
“The sooner we have a plan to deal with the deficit, the sooner we give our businesses the certainty they will need in order to make additional investments to grow and hire,” he said.
It was the second month in a row of virtually no improvement in the jobs situation. The economy generated a paltry net 18,000 positions in June, after just 25,000 in May.
Expected to power up the economic recovery, the private sector added just 57,000 positions last month — compared to 241,000 in April.
Offsetting that were steep layoffs by federal, state and local governments as they slash payrolls to address budget deficits.
Added together, May and June paint a picture of both extremely slow growth in the economy and a reticence by businesses, many of which have been piling up cash reserves, to expand their workforces.
US stock markets plunged on the data, wiping out solid gains made Thursday on the back of preliminary, private-sector data that had suggested a much brighter jobs picture.