POSTED: 01:30 a.m. HST, Jul 07, 2012
WASHINGTON » The American job machine has jammed. Again.
The economy added only 80,000 jobs in June, the government said Friday, erasing any doubt that the United States is in a summer slump for the third year in a row.
"Let's just agree: This number stinks," said Dan Greenhaus, chief global strategist at the investment firm BTIG.
It was the third consecutive month of weak job growth. From April through June the economy produced an average of just 75,000 jobs a month, the weakest three months since August through October 2010.
The unemployment rate stayed at 8.2 percent — a recession-level figure, even though the Great Recession has technically been over for three years.
The numbers could hurt President Barack Obama's odds for re-election. Mitt Romney, the presumed Republican nominee, said they showed that Obama, in 3 1/2 years on the job, had not "gotten America working again."
"And the president is going to have to stand up and take responsibility for it," Romney said in Wolfeboro, N.H. "This kick in the gut has got to end."
Obama, on a two-day bus tour through the contested states of Ohio and Pennsylvania, focused on private companies, which added 84,000 jobs in June, and took a longer view of the economic recovery.
"Businesses have created 4.4 million new jobs over the past 28 months, including 500,000 new manufacturing jobs," the president said. "That's a step in the right direction."
The Labor Department's report on job creation and unemployment is the most closely watched monthly indicator of the U.S. economy. There are four reports remaining before Election Day, including one on Nov. 2, four days before Americans vote.
No president since World War II has faced re-election with unemployment over 8 percent. It was 7.8 percent when Gerald Ford lost to Jimmy Carter in 1976. Ronald Reagan faced 7.2 percent unemployment in 1984 and trounced Walter Mondale.
Patrick Sims, director of research at the consulting firm Hamilton Place Strategies, said that "time has run out" for unemployment to fall below 8 percent by Election Day.
That would require an average of about 220,000 jobs a month from July through October — more like the economy's performance from January through March, when it averaged 226,000 per month.
Few economic analysts expect anything close to that.
"The labor market is treading water," said Heidi Shierholz, an economist at the Economic Policy Institute. She called it an "ongoing, severe crisis for the American workforce."
The Labor Department report put investors in a sour mood.
The Dow Jones industrial average dropped 124 points. Industrial and materials companies, which depend on economic growth, were among the stocks that fell the most. The price of oil fell $2.77 per barrel to $84.45.
Money flowed instead into U.S. Treasurys, which investors perceive as safer than stocks when the economy is weakening. The yield on the benchmark 10-year U.S. Treasury note fell to 1.54 percent, from 1.59 percent on Thursday.
Investors were already worried about a debt crisis that has gripped Europe for almost three years and recent signals that the powerhouse economy of China is slowing.
Earlier this week the European Central Bank and the central bank of China cut interest rates in hopes of encouraging people and businesses to borrow and spend money.
For American investors, however, the jobs report fell into an uncomfortable middle ground.
Federal Reserve Chairman Ben Bernanke promised last month that the Federal Reserve would take additional steps to help the economy "if we're not seeing a sustained improvement in the labor market."
But some financial analysts said that the Labor Department report, while disappointing, was not weak enough to lock in further action by the Fed at its next meeting July 31 and Aug. 1.
The slowdown in job growth has been stark. From December through February the economy produced an average of 252,000 jobs a month, twice what is needed to keep up with population growth.