US stock futures bounce on hopeful jobs report
WASHINGTON (AP) — Hiring picked up slightly in July and the unemployment rate dipped to 9.1 percent. The modest improvement may quiet fears of another recession a day after Wall Street posted its worst losses in nearly three years.
Employers added 117,000 jobs last month, the Labor Department said Friday. That's better than the past two months, which were also revised higher.
The better-than-expected report gave stocks a small lift one day after the Dow Jones industrial average fell more than 500 points. The Dow jumped as much as 171 points when the market opened, but then erase most gains to rise only 31 points in early-morning trading.
The report "should lessen fears that the recovery is truly faltering," said Jim O'Sullivan, chief economist at MF Global.
Still, the economy needs twice as many net jobs per month to rapidly reduce unemployment. The rate has topped 9 percent in every month except two since the recession officially ended in June 2009.
"These numbers are not great," said Ian Shepherdson, an economist at High Frequency Economics, in a note to clients. "But they are a long way from recession territory."
Businesses added 154,000 jobs across many industries. Governments cut 37,000 jobs last month. Still, 23,000 of those losses were almost entirely because of the shutdown of Minnesota's state government.
The unemployment rate fell from 9.2 percent in June partly because some unemployed workers stopped looking for work. That means they are no longer counted as unemployed.
As a result, the number of unemployed people fell to 13.9 million, down from 14.1 million. Still, that's nearly double the total before the recession.
The participation rate, which measures the percentage of people working or searching for jobs, fell to 63.9 percent, the lowest in 27 years.
The report follows a string of gloomy data that shows the economy has weakened since last year.
The economy expanded at a meager 0.8 percent annual rate in the first six months of this year, the slowest pace since the recession officially ended. Manufacturers are barely growing. Service companies are growing at the weakest pace in a year and a half. Consumers cut spending in June for the first time in 20 months, and they saved more.
High gas prices and scant wage increases have squeezed U.S. consumers this year. And consumer spending accounts for 70 percent of economic activity.
Businesses have responded by cutting hiring after a strong start in which they added an average of 215,000 jobs a month from February through April.
But the government revised the previous two months' totals to show hiring wasn't as weak as first estimated.
The economy added 53,000 in May, up from an earlier estimate of 25,000, and 46,000 in June, up from 18,000. June's total was still the weakest in nine months.
Hiring in July was broad-based. Manufacturers added 24,000 jobs in July, as auto companies laid off fewer workers in July than usual. Retailers hired a net total of 26,000 employees. Employment in health care grew 31,000. Hotels and restaurants added 17,000.
Workers did see some pay gains last month. Average hourly wages rose 10 cents to $23.13.
The number of people working part-time who would prefer full-time work declined, while those who've given up looking increased. Including both groups, the under-employment rate declined to 16.1 percent.
Copyright 2011 The Associated Press.