Nonfarm payrolls lost 125,000 jobs in June, even though the private sector added 83,000 positions, as the federal government wound down temporary employment for the 2010 Census, the Labor Department reported Friday.
Economists polled by Thomson Reuters expected a decline of 110,000 jobs.
Payrolls for the 2010 Census fell 225,000, pushing job creation negative for the first time since December.
The unemployment rate fell to an 11-month low of 9.5% from 9.7%.
Adolfo Laurenti, an economist at Mesirow Financial, said the lower jobless rate was mostly due to people exiting the workforce at a faster clip. That happens when idle workers stop looking for work.
“The latest data is not pretty,” Laurenti wrote in a research note. “This recovery, which was never robust in the first place, enters the summer with a weak labor market. Although we expect that private payrolls will continue to grow, the current pace of improvement is too slow to provide any relief to the people struggling to find jobs.”
Anthony Chan, chief economist for JPMorgan Private Wealth Management, estimates the U.S. economy needs to create 115,000 to 125,000 new jobs each month just to accommodate new entries to the workforce, such as new college graduates. Through the first six months of 2010, nonfarm payrolls have averaged 147,000 new jobs a month.
Laurenti said June’s small declines in both hours worked and earnings paid illustrates the recovery’s slowing momentum. The average workweek for all workers decreased 0.1 hour, or six minutes, to 34.1 hours. The average workweek for production and non-supervisory employees held steady at 33.4 hours.
Average hourly earnings for production and non-supervisory employees were flat at $19.00 in June following two monthly increases. Economists expected a 0.1% increase in hourly earnings and forecast a 34.2 hour average workweek, according to Thomson Reuters.
“The light at the end of the tunnel is not as close as we had hoped,” Laurenti wrote.
