Friday, August 04, 2006

Unemployment Rate Hits 5-Month High

Employers Add Just 113,000 Jobs in July As Unemployment Rate Hits 5-Month High; Wages Solid

Eannine Aversa, AP

WASHINGTON Aug 4, 2006 (AP)— Hiring slowed in July as employers added just 113,000 new jobs, propelling the unemployment rate to a five-month high of 4.8 percent and providing fresh evidence that companies are growing cautious amid high energy prices.

The latest snapshot Friday from the Labor Department added to the evidence from a variety of economic barometers that the economy is slowing. That raised hopes among investors and some economists that the Federal Reserve can take a breather next week from its rate-raising campaign and leave interest rates alone.

On Wall Street, stocks moved sharply higher. The Dow Jones industrials gained 54 points and the Nasdaq was up 15 in morning trading.

The tally of new jobs last month was weaker than the 124,000 added in June and was the lowest total since May, when payrolls grew by 100,000.

"Businesses are guarded as they see a downshifting of economic growth, rising energy prices and higher interest rates," said Ken Mayland, president of ClearView Economics.

The civilian unemployment rate jumped from 4.6 percent in June to 4.8 percent in July, matching the jobless rate in February. The last time the unemployment rate was higher was in December, at 4.9 percent.

Economists had forecast a gain of about 145,000 jobs and an unemployment rate of 4.6 percent.

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Any ideas on how this will be spun?


Buck