Sun, Aug 05, 2007 - Page 11 News List

US unemployment last month edged up to 4.6 percent


The US unemployment rate inched up to a six-month high of 4.6 percent last month as hiring simmered down. Workers' wages, meanwhile, grew modestly. Wall Street tumbled.

The latest snapshot of conditions around the country, released by the US Department of Labor on Friday, showed that new job creation has slowed. Employers increased payrolls by 92,000 last month, down from 126,000 in June. It marked the fewest add-ons in a month since February.

Hefty job cuts by the government were a big factor in the subdued employment picture. Jobs also were eliminated by construction firms, factories and retailers -- in part reflecting the toll of the sour housing market and the struggles of the US auto industry. Employment in food services, health care, architecture and engineering, computer design and in other industries expanded.

"There are some indications that the job market may be easing up a tad, but the fundamentals still remain quite solid," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.

"So for people looking for work there are still opportunities, but some areas are much more active in seeking workers than others," she said.

Even with the uptick from June's 4.5 percent, last month's jobless rate was still low by historical standards. The lowest unemployment rate in a generation -- 3.8 percent -- was logged in 2000. In contrast, the rate topped 10 percent in the early 1980s.

Last month's jobless rate was the highest since January, when it also was 4.6 percent. The last time it was higher was August last year.

A separate report showed that the service sector -- an engine of the US economy -- lost momentum last month. The Institute for Supply Management's index dipped to 55.8, from 60.7 in June. Readings above 50 indicate expansion, while those below 50 indicate contraction.

On Wall Street, stocks slid. Investors -- already wary because of the latest economic news -- were gripped by fresh fears of a credit crunch. The Dow Jones industrials plunged 281.42 point to close at 13,181.91.

The latest economic reports were consistent with analysts' forecasts that the economy would grow gradually -- but not like gangbusters -- through the rest of this year.

The new employment picture was weaker than economists had expected. They were expecting employers to add around 135,000 jobs last month.

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