U.S. job growth stalled in
July, further evidence that the economy’s recovery may slow in the
second half of the year.
Payrolls increased by 6,000 last month, the Labor Department
said, compared with 66,000 in June and the 60,000 that economists
had expected. Unemployment held at 5.9 percent, close to April’s
6 percent, which was the highest since August 1994. While consumer
incomes and spending rose in June, as Commerce Department figures
showed today, that may change with Americans unable to find jobs.
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“If this weren’t a recovery, I would feel it was the prelude
to a recession,” said Donald Ratajczak, retired director of
Georgia State University’s Economic Forecasting Center and the
founder of BrainWorks Ventures Inc., a venture-capital firm in
Atlanta.
A stock market slide that pushed the Standard & Poor’s 500
Index to a five-year low may have caused some companies to delay
hiring. Factories shed jobs for a 24th straight month in July.
That followed a 2.4 percent drop in new factory orders in June,
the biggest decline in seven months, also reported today by the
Commerce Department. The economy expanded at a 1.1 percent annual
rate in the second quarter, compared with 5 percent in the first.
Evidence the recovery is losing momentum led Goldman, Sachs &
Co. to predict a series of interest-rate cuts by the Federal
Reserve this year. Economists at Lehman Brothers Inc. lowered
their growth forecast for the second half to less than 2.5
percent. Some economists, including Ratajczak, won’t dismiss the
possibility of the U.S. slipping back into recession.
Bloomberg News
