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Home arrow News arrow US Unemployment Rate Reaches Fifth Month High
US Unemployment Rate Reaches Fifth Month High Print E-mail
Friday, 04 August 2006
As employers added just 113,000 new jobs, hiring slowed in July. This has caused propelling on the unemployment rate to a five-month high of 4.8 percent. This also provides a fresh evidence that companies are growing cautious amid high energy prices.

This data has caused investors and economists rise their hopes that the Federal Reserve can take a breathe next week from its rate-raising campaign and leave interest rates alone.

Stocks also moved remarkably higher as shown in Wall Street. Ken Mayland, president of ClearView Economics, said that businesses are guarded as they see a downshifting of economic growth, rising energy prices and higher interest rates.

Matching the jobless rate in February, the civilian unemployment rate jumped from 4.6 percent in June to 4.8 percent in July. The last time the unemployment rate was higher was in December, at 4.9 percent. Economists forecasted a gain of about 145,000 jobs and an unemployment rate of 4.6 percent.

Manufacturers and information companies, including publishers and telecommunication firms, open jobs last month.  On the other hand, employment in retailing and in the government was flat. This has added to the restraining of overall hiring.

Economists anticipated a 0.3 percent rise. Wage growth is welcomed by workers. Friday's weaker job growth would justify such a breather, offering more evidence of slowing economic activity. Others Fed-watchers who are worried about inflation think policymakers have another interest-rate jump in store.

The hiring slowdown comes as companies cope with soaring energy prices and higher interest rates. That, in turn, has slowed the economy. The economy slowed to a pace of 2.5 percent in the April-to-June quarter, compared with the 5.6 percent growth rate in the first three months of the year.

Last month, manufacturers cut 15,000 jobs, reversing the gain of 22,000 the month before. Employment was flat in retailing, after the sector shed just over 4,000 jobs in June.

By M. Sese

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