U.S. job growth nearly stalled last month, the government reported today, reinforcing other signs that the economic recovery is losing steam just four months before the presidential election.
Employers added 32,000 workers to their payrolls in July, the smallest monthly gain since December and the fourth consecutive month in which the pace of job growth has slowed, the Labor Department reported.
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Bush Campaign: Gary Blank, economic adviser for the Bush-Cheney campaign, offered the GOP ticket's take on the latest economic data. (Aug. 6).
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Kerry Campaign: Jason Furman, economic adviser for the Kerry-Edwards campaign, gave the Democrats' take (Aug. 6).
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Video: Washington Post staff writer Nell Henderson discusses the latest unemployment report.
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Hiring also was weaker in May and June than previously thought, according to the department's revisions of earlier figures, which sliced 61,000 jobs off the earlier totals. That means the economy added an average of 106,000 jobs a month since May, far below the 150,000 monthly pace many economists believe is needed to keep up with population growth.
Yet the unemployment rate declined slightly, to 5.5 percent in July, the lowest level since October 2001, from 5.6 percent the month before, as more people did find work.
The figures reflect employers' reluctance to add to their payrolls in July after the overall pace of economic growth slowed sharply in the spring, dragged down by higher oil prices, rising interest rates and weak consumer spending, analysts said. Although they do not see the economy sliding back into recession, many forecasters expect the expansion to continue at the recent, cooler rate, with the pace influenced in large part by what happens to oil prices.
"We have slowed down dramatically," said Stuart G. Hoffman, chief economist for PNC Financial Services Group. "If oil stays here [around $44 a barrel] or goes higher, I have fears . . . about the economy growing."
Stock prices plunged and bond yields dropped as many investors saw the job figures as a sign the economy may chill even more, which would depress profit growth and restrain inflation.
Many executives who make hiring and spending decisions may also have pulled back in recent months because of the uncertainty created by recurrent terror threats, Mideast turmoil and the upcoming election, said Richard Yamarone, director of economic research at Argus Research Corp. He said the economy is still recovering as much from the Sept. 11, 2001, terrorist attacks as from the recession that year.
"Some of these fears will dissipate after the election. But we're going to have these fears no matter who is in office," Yamarone said.
The Bush administration has been cautious in recent months about making claims about the job market, warning that the monthly job figures bounce around and urging people to focus on the longer term improvements.
