 |
June Job Growth Weaker
14th of July 2006
WASHINGTON: The Labor Department's employment report released Friday revealed that U.S. employers added 121,000 workers to their payrolls last month - fewer than expected - but that the jobless rate stayed at a five-year low and hourly earnings rose.
However, the 3.9% year-over-year gain in average hourly earnings - the biggest in five years - and the 4.6% unemployment rate increased anxiety that rising wages may weigh on the inflation-wary Federal Reserve.
"It suggests we might have slowing growth and rising inflationary pressures," said Rebecca Patterson, a currency strategist at J.P. Morgan in New York.
U.S. Treasury debt prices climbed after the report indicated the labor market was weaker than forecast.
Markets were stunned by the soft employment number, which came after many economists had recently raised their expectations of job growth.
Stocks fell substantially on worries that wage growth might be a sign of inflation and had their worst one-day percentage slide in a month. The Dow Jones industrial average was down 142.88 points, or 1.27% at 11,082.74.
The dollar slumped to one-month lows against the euro and yen.
|
