By CHRISTOPHER S. RUGABER and
PAUL WISEMAN
Associated Press
WASHINGTON — The American job machine has jammed. Again.
The economy added only 80,000 jobs in June, the government said Friday, erasing any doubt that the United States is in a summer slump for the third year in a row.
“Let’s just agree: This number stinks,” said Dan Greenhaus, chief global strategist at the investment firm BTIG.
It was the third consecutive month of weak job growth. From April through June, the economy produced an average of just 75,000 jobs a month, the weakest three months since August through October 2010.
The unemployment rate stayed at 8.2 percent — a recession-level figure, even though the Great Recession has technically been over for three years.
The Labor Department’s report on job creation and unemployment is the most closely watched monthly indicator of the U.S. economy. There are four reports remaining before Election Day, including one on Friday, Nov. 2, four days before Americans vote.
No president since World War II has faced re-election with unemployment over 8 percent. It was 7.8 percent when Gerald Ford lost to Jimmy Carter in 1976. Ronald Reagan faced 7.2 percent unemployment in 1984 and trounced Walter Mondale.
Patrick Sims, director of research at the consulting firm Hamilton Place Strategies, said that “time has run out” for unemployment to fall below 8 percent by Election Day.
That would require an average of about 220,000 jobs a month from July through October — more like the economy’s performance from January through March, when it averaged 226,000 per month.
Few economic analysts expect anything close to that.
“The labor market is treading water,” said Heidi Shierholz, an economist at the Economic Policy Institute. She called it an “ongoing, severe crisis for the American work force.”
The Labor Department report put investors in a sour mood.
The Dow Jones industrial average dropped 124 points. Industrial and materials companies, which depend on economic growth, were among the stocks that fell the most. The price of oil fell $2.77 per barrel to $84.45.
Money flowed instead into U.S. Treasurys, which investors perceive as safer than stocks when the economy is weakening. The yield on the benchmark 10-year U.S. Treasury note fell to 1.54 percent, from 1.59 percent on Thursday.
Investors were already worried about a debt crisis that has gripped Europe for almost three years and recent signals that the powerhouse economy of China is slowing.
Earlier this week, the European Central Bank and the central bank of China cut interest rates in hopes of encouraging people and businesses to borrow and spend money.
For American investors, however, the jobs report fell into an uncomfortable middle ground.
Federal Reserve Chairman Ben Bernanke promised last month that the Federal Reserve would take additional steps to help the economy “if we’re not seeing a sustained improvement in the labor market.”
But some financial analysts said that the Labor Department report, while disappointing, was not weak enough to lock in further action by the Fed at its next meeting July 31 and Aug. 1.
The slowdown in job growth has been stark. From December through February, the economy produced an average of 252,000 jobs a month, twice what is needed to keep up with population growth.
But the jobs generator started sputtering in March, when job growth slowed to 143,000.
At first, economists blamed the weather for warping the numbers. An unusually warm winter allowed construction companies and other employers to hire earlier in the year than usual, effectively stealing jobs from the spring, they said.
But weird weather could only explain so much, and the bad news kept coming: The economy added just 68,000 jobs in April and 77,000 in May. Those figures reflect revisions from earlier estimates of 77,000 for April and 69,000 for May.
June’s dud of a number made it clear that the economy has fallen into the same pattern it followed in 2010 and 2011: It gets off to a relatively fast start, then fades at midyear.
Offering some hope, the slowdowns the two previous years lasted just four months each.
From June through September 2010, the economy lost an average of 75,000 jobs per month. From May through August 2011, the economy added an average of 80,000 per month. Both years, hiring picked up significantly when the weak stretches ended.
To be sure, the United States is still suffering the hangover of a financial crisis and the worst recession since the 1930s. The economy lost 8.8 million jobs during and after the recession. It has regained 3.8 million.
