The number of jobless across Canada sidled downward last month — but Statistics Canada says most of the dip can be traced to people abandoning their search for work.
The national unemployment rate was pegged at 7.2% in June with just over seven-thousand net new jobs added — but Stats Can says nearly 17,000 people quit looking for work last month and the lower unemployment rate reflects the smaller workforce.
In the U.S., employers added only 80,000 jobs in June, a third straight month of weak hiring that will likely complicate President Barack Obama’s reelection efforts with the economy still struggling three years after the recession ended.
The unemployment rate was unchanged at 8.2%, the U.S. Labor Department said in its report Friday.
The American economy added an average of just 75,000 jobs a month in the April-June quarter. That’s one-third of the 226,000 a month created in the first quarter.
For the first six months of the year, U.S. employers added an average of 150,000 jobs a month. That’s fewer than the 161,000 a month for the first half of 2011. And it shows that the job market is weakening.
“It’s a disappointing report,” said George Mokrzan, director of economics at Huntington National Bank in Columbus, Ohio. He said the job gains are consistent with sluggish economic growth.
The report is troubling news for Obama, whose prospects of winning re-election in November could hinge largely on the health of the economy.
The stock market opened sharply lower. The Dow Jones industrial average fell 124 points in the first minutes of trading, to 12,772, and the Standard & Poor’s 500 index fell 11 points, or 0.8%.
Money flowed into government bonds, perceived by investors as safer. The yield on the benchmark 10-year U.S. Treasury note, which moves in the opposite direction from its price, fell to 1.56%, from 1.59% on Thursday.
A weaker job market has made consumers less confident. They have pulled back on spending, even though gas prices have plunged since early spring.
High unemployment could shift momentum to Mitt Romney, the presumptive Republican presidential nominee. An Associated Press-GfK poll released last month found that more than half of those surveyed disapproved of Obama’s handling of the economy.
Obama is expected to face voters with the highest unemployment rate of any president since the Great Depression, and the economy is the top issue for many voters.
The June job figures could also prompt the Federal Reserve to take further action to try to boost the economy. The Fed last month downgraded its economic outlook for 2012. It predicted growth of just 1.9% to 2.4%. And it doesn’t expect the unemployment rate to fall much further this year.
John Silvia, chief economist at Wells Fargo, said he didn’t think Friday’s report would prod the Fed to launch a new effort to boost growth after its next policy meeting at the end of this month.
But Silvia said if the job market doesn’t improve over the next couple of months, the Fed might launch a third round of bond buying at its September meeting. Bond buying by the Fed is intended to lower long-term interest rates to encourage borrowing and spending.
“Most firms can achieve their output target with their existing labour force, so they are just not hiring,” Silvia said.
Silvia said the June job growth is consistent with annual economic growth below 2%. Wells Fargo is forecasting growth in the April-June quarter at 1.5%, weaker than the 1.9% growth in the first quarter.
Such growth is too weak to lower the unemployment rate.
Revisions to the job gains in April and May were little changed from the government’s previous estimates.
There were some good signs in the report. The average workweek grew to 34.5 hours from 34.4 in May, boosting many workers’ paychecks. And average hourly pay rose 6 cents to $23.50. Hourly pay has increased 2% in the past year and is ahead of inflation, which has fallen in recent months along with gas prices.
About one-third of the jobs gained in June were in temporary services. Manufacturing added 11,000, its ninth straight month of gains.
But growth in factory jobs slowed sharply in the second quarter compared with the first. Health care added 13,000 jobs, and financial services gained 5,000. Retailers, transportation firms and government cut jobs.