Fewer Jobs Added In June

The campaign of Democratic presidential candidate Sen. John F. Kerry (Mass.) said the job figures were not good enough.

"John Kerry thinks America can do better," campaign spokesman Phil Singer said in a written statement. "These numbers are a reminder that it's going to take more than just rhetoric to lift the economy."

The economy expanded by about a 4 percent annual rate in October through March, in part because of recent federal tax cuts and low interest rates. But as those effects waned and prices got higher, the pace of growth appears to have ebbed somewhat.

The Commerce Department, for example, reported yesterday that new orders to U.S. factories dropped 0.3 percent in May, for a second monthly decline. U.S. automakers' sales slid in June and several chain-store retailers reported disappointing sales. Manufacturing activity rose last month, but at a slower pace.

The employment report caused several analysts to trim their estimates of economic growth to around a 3.5 percent annual rate in the past three months.

Economists found signs of both improvement and weakness in the June labor market.

Employers added 1.5 million jobs since August. But the nation's total number of non-farm jobs remains 1.2 million below the peak reached in March 2001 when the recession began.

The industries that added jobs in June included health care and social services, professional and technical services, transportation, and warehousing.

But manufacturing lost 11,000 jobs in June after four months of growth. Construction and government employment was flat. Retail jobs increased only slightly.

Particularly troubling to some analysts were the June declines in both the length of the average workweek and average weekly earnings. The workweek, at 33.6 hours, seasonally adjusted, was the shortest since the department began recording the data in 1964. The workweek has touched that low before, including several months last year.

Some analysts speculated that these declines might reflect the closing of many businesses and government offices for former president Ronald Reagan's state funeral. But others said they were consistent with the overall softening of the economy.

The portion of the jobless who had been unemployed for more than six months was 21.6 percent in June, seasonally adjusted, down from 21.9 percent in May, but not much changed from the 21.8 percent of June last year.

There also remained 1.5 million people in June -- unchanged from a year ago -- who said they wanted a job but could not find one during the past 12 months. Those people were not counted among the unemployed because they did not actively look for work in the four weeks before the Labor Department's survey. In June, that group included 478,000 "discouraged" workers -- the same number as a year earlier -- who said they were not looking for work because they thought there were no jobs available for them.

After adding those who said they were working part-time because they couldn't find full-time jobs, the department's measure of the nation's "labor underutilization" was 9.6 percent in June, about the same level as the previous two months.

Several analysts said the employment report justified the Fed's plan to raise its benchmark federal funds rate very gradually in coming months.

"The economy is growing, but not in an inflationary way that will cause the Fed to be more aggressive," said Stuart G. Hoffman, senior vice president and chief economist at PNC Financial Services Group.

The unemployment rate for blacks or African Americans rose 0.2 percentage points to 10.1 percent. The rate among Hispanic or Latino workers fell 0.3 points to 6.7 percent. The white jobless rate was unchanged at 5 percent.