TOPICS > Economy

U.S. Employers Cuts Payrolls by 62,000 in June

BY Admin  July 3, 2008 at 10:42 AM EDT

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Unemployment held steady at 5.5 percent after increasing by half a point in May, the most dramatic jump in 22 years.

U.S. employers have cut a total of 438,000 jobs this year as they adjust to an economic downturn triggered by housing market woes and compounded by soaring energy and food prices. Oil neared $146 a barrel Thursday while prices at the pump remain around $4 a gallon.

“The employment report today was largely in line with expectations,” White House spokeswoman Dana Perino said. “We are no doubt in a period of slow growth, it is growth nonetheless but it’s very slow and it’s had an impact on employment.”

Many economists fear the U.S. is on the brink or has already entered a recession, but the official determination has not been made yet.

Earlier this year, Congress passed a $152 billion stimulus package that included tax rebates to encourage consumer spending. On Thursday, Perino said these checks are being spent.

Those with jobs are still feeling the economic downturn as employers cut back full-time hours. Average hourly earnings rose 0.3 percent from May to $18.01.

New applications for unemployment rose by 16,000 last week, pushing unemployment insurance claims to 404,000, its highest level since late March, another Labor Department report said.

June’s losses follow higher-than-expected declines during both April and May, when the Labor Department recorded job losses of 67,000 and 49,000 respectively.

The hardest-hit sectors were construction, which lost 43,000 jobs, followed by manufacturing with 33,000 lost jobs and professional services, which lost 51,000 positions in the financial services and real estate industries. Education, health services, the hospitality industry and government jobs grew but not enough to offset the losses.

The flagging economy has topped voter concerns in the presidential election.

The presumptive GOP and Democratic nominees have focused on explaining their economic policies, and both reacted to Thursday’s news.

“To get our economy back on track, we must enact a jobs-first economic plan that supports job creation, provide immediate tax relief for families, enact a plan to help those facing foreclosure, lower health care costs, invest in innovation, move toward strategic energy independence and open more foreign markets to our goods,” said Republican candidate Sen. John McCain of Arizona.

His Democratic rival, Illinois Sen. Barack Obama, took a swipe at President Bush as he tried to link McCain to his unpopularity. “The American people are paying the price for the failed economic policies of the past eight years, and we can’t afford four more years of more of the same. That is the essential issue of this campaign because Senator McCain has fully embraced the Bush economic agenda. I believe it has to change.”