Hiring around the country was less vigorous than Wall Street was predicting last month, but a welcome surprise came in the nation's unemployment rate, which fell to 5 percent in June, its lowest level in nearly four years.
The Labor Department reported today that U.S. employers added 146,000 jobs in June, which was below analyst expectations of at least 188,500 new jobs. It also fell short of the 150,000-per-month rate that economists consider a healthy number.
But the drop in unemployment bested Wall Street predictions that it would hold steady at 5.1 percent. The drop was mostly due, though, to a tiny 1,000-strong increase in the U.S. work force, a statistical category which includes those looking for work as well as those who have work.
The last report of a 5 percent unemployment rate was in September 2001. The last time it was lower was in August 2001, when it was 4.9 percent.
Although the latest snapshot supports the view of Federal Reserve Chairman Alan Greenspan that the country's labor market is gradually improving, some analysts said the jobs picture remains bleak.
"This is a very disappointing report," said Peter Morici, business professor at the University of Maryland. "Jobs growth has clearly slowed and many would-be job seekers are discouraged by the poor quality of jobs available. Jobs growth has been erratic and unexceptional."
Others, however, took some comfort. "It's enough to keep the wolves at the bay but not enough enough to get excited about," Michael Jansen, currency strategist at National Australia Bank in New York, told the Reuters news agency.
The Labor Department also revised the jobs-growth numbers upward for both April and May, boosting the two-month count by 44,000 jobs.
Most of June's employment growth came in the service sector. Professional and business-services jobs rose by 56,000, education and health services were up 38,000, and leisure and hospitality payrolls grew by 19,000.
The manufacturing sector -- which has shed some 3 million jobs since 2000 -- was the weakest sector, losing 24,000 jobs in June, showing the continued effects of inexpensive imports.
"The June employment report was a mixed bag," wrote Stephen Stanley in a report to clients for Greenwich Capital Management. "[It] was just strong enough to justify continued [Federal Reserve] tightening but just soft enough to prevent any heightened concern about inflation prospects."
Federal Reserve officials have raised short-term interest rates nine times since June 2004 to head off inflation, and economists are predicting a 10th hike next month.