Payrolls fell by 51,000, less than forecast, after a decline of 51,000 in June that was smaller than initially reported, the Labor Department said today in Washington. The jobless rate rose to 5.7 percent, the highest since March 2004, from 5.5 percent the prior month. According to the household survey, employment fell by 72,000 while unemployment rose by 285,000.
The Labor Department noted that over the past three months there has been a "notable increase" in youth unemployment, though joblessness also rose for those over 25 years old.
Average hourly earnings increased $0.06, or 0.3%, to $18.06. That was up just 3.4% from a year earlier, suggesting workers are having a hard time commanding higher salaries in the face of a weak jobs market. Fed officials are counting on the disinflationary slack that comes from a slowing economy to offset higher energy, food and commodity prices and keep inflation in check.
Wall Street economists had expected a 65,000 decline in payrolls last month and a 5.6% unemployment rate, according to a Dow Jones Newswires survey. Fed officials last month said they expect a 5.5% to 5.7% jobless rate at the end of the year.