Flat jobs data signal weakest recovery in decades
WASHINGTON (AP) _ The job market is defying history.
A dismal June employment report shows that employers are adding nowhere near as many jobs as they normally do this long after a recession has ended.
Unemployment has climbed for three straight months and is now at 9.2 percent. There's no precedent, in data going back to 1948, for such a high rate two years into what economists say is a recovery.
The economy added just 18,000 jobs in June. That's a fraction of the 90,000 jobs economists had expected and a sliver of the 300,000 jobs needed each month to shrink unemployment significantly.
The excruciatingly slow growth is confounding economists, spooking consumers and dismaying job seekers. Friday's report forced analysts to re-examine their assumption that the economy would strengthen in the second half of 2011.
They had expected improvement in June after a bleak jobs report for May. They figured that hiring in May had been artificially weakened by temporary factors _ a run-up in gasoline prices to $4 a gallon and factory disruptions caused by Japan's earthquake and nuclear crisis.
The June numbers were even worse than May's, even though gasoline prices fell and factories revved up again.
Obama: Uncertainty over debt limit impacts hiring
WASHINGTON (AP) _ Facing a dismal jobs report, President Barack Obama called on Congress Friday to end uncertainty over their debt standoff and pass a litany of administration-backed proposals, including a payroll tax cut extension and three free trade agreements. Obama's top economist said implementing those policies would reduce the jobless rate a full point by the time Obama faces re-election in the fall of 2012.
But Republican opposition and Washington's heated partisan atmosphere would likely make passing the full slate of administration proposals a political pipe dream.
Obama spoke from the Rose Garden shortly after the release of fresh figures that showed employers added just 18,000 jobs in June, the fewest in nine months, and the unemployment rate rose to 9.2 percent. The president said the numbers were yet another sign that a full economic recovery is still elusive.
"Our economy as a whole just isn't producing nearly enough jobs for everybody who is looking," Obama said.
The jobs report comes against the backdrop of negotiations on cutting government spending and increasing the nation's borrowing limit in order to prevent the U.S. from defaulting on its debt. Obama said the new jobs report adds fresh urgency to the talks, saying an agreement would end uncertainty that is keeping businesses from hiring.
Grim jobs report casts shadow over debt talks
WASHINGTON (AP) _ President Barack Obama used a bleak jobs report Friday to prod Congress toward a swift agreement on deficits and the national debt. The higher unemployment numbers hardened partisan views that a weak economy can't tolerate added taxes or cuts in spending, both key to the grand deal Obama seeks.
White House, congressional negotiators and their aides worked to bridge differences over how to reduce long-term deficits by as much as $4 trillion over 10 years. Obama plans to call the eight top leaders of Congress to the White House on Sunday to assess progress.
Summing up the difficulties facing them, House Speaker John Boehner likened the task to a notoriously confounding puzzle. "This is a Rubik's Cube that we haven't quite worked out yet," he said.
A budget agreement is central to increasing the nation's borrowing limit, currently capped at $14.3 trillion, by Aug. 2 to avoid a potentially catastrophic government default. That looming deadline and a new unemployment rate of 9.2 percent heightened the pressure for a deal, uniting the two highest-profile challenges now facing Obama's presidency.
Consumers borrowed more for 8th month in May
WASHINGTON (AP) _ Americans took on more debt in May and used their credit cards more for only the second time in nearly three years. Consumers stepped up their borrowing just as the economy began to slump and hiring slowed.
The Federal Reserve said Friday that consumer borrowing rose by $5.1 billion in May, the eighth straight monthly increase. It followed a revised gain of $5.7 billion in April. Borrowing in the category that covers credit cards increased, as did borrowing in the category for auto and student loans.
The overall increase pushed consumer borrowing to a seasonally adjusted annual level of $2.43 trillion in May. That was just 1.7 percent higher than the nearly four-year low of $2.39 trillion hit in September.
Borrowing is a sign of confidence in the economy. Consumers tend to take on more debt when they feel wealthier. That boosts consumer spending. Ultimately, it gives businesses more faith to expand and hire. An increase in credit card debt can also be a sign of people falling on harder times.
Wholesale inventories up in May but sales decline
WASHINGTON (AP) _ Wholesale companies added to their stockpiles for a 17th straight month in May but their sales declined for only the second time in the past 11 months, providing further evidence of the economy's spring slowdown.
The Commerce Department said Friday that wholesale inventories rose 1.8 percent in May, the biggest gain since October. Some of that increase reflected an unwanted buildup of goods because sales declined.
Sales at the wholesale level fell 0.2 percent, the report said. The sales drop was led by a big decline in auto sales and the inventory buildup also reflected a large rise in auto stockpiles.
The weakness in May sales offered the latest evidence that the economy slowed in the spring as consumers struggled with soaring gas prices and high unemployment.
IMF agrees to give Greece $4.2 billion
WASHINGTON (AP) _ The International Monetary Fund has approved providing Greece just over 3 billion euros ($4.2 billion) in the latest installment of a rescue package aimed at helping the country pull back from an impending debt default.
The move by the executive board was expected after a decision last week by eurozone finance ministers to give Greece their portion of a 12 billion euros ($17.39 billion) loan payment that is part of a 110 billion euro ($259 billion) package agreed on last year.
The IMF action Friday under new Managing Director Christine Lagarde came as European banks, insurance companies and other financial institutions were trying to get the private sector involving in helping save Greece from default.
By The Associated Press(equals)
The Dow Jones Industrial Average lost 62.29, or 0.5 percent, to 12,657.20. The Nasdaq Composite dropped 12.85, or 0.4 percent, to 2,859.81. The Standard and Poor's 500 Index fell 9.42 points, or 0.7 percent, to 1,343.80.
Benchmark West Texas Intermediate crude for August delivery gave up $2.47, or 2.5 percent, to settle at $96.20 per barrel on the New York Mercantile Exchange.
In London, Brent crude lost 26 cents to settle at $118.33 per barrel on the ICE Futures exchange. Gasoline futures also dropped. The contract for August delivery dropped 3.44 cents to settle at $3.0926 per gallon on the Nymex.
In other Nymex trading for August contracts, heating oil lost less than a penny to settle at $3.0964 per gallon and natural gas gained 6.6 cents to settle at $4.204 per 1,000 cubic feet.