Unemployment creeps up

<font size=5>U.S. jobless rate climbs a little less than expected in June; payrolls slashed</font>

July 6, 2001: 9:08 a.m. ET (=15:08 MESZ)

NEW YORK (CNNfn) - <font color="#FF0000">The U.S. unemployment rate edged higher in June, the government said Friday, but not as high as analysts expected, while the economy shed thousands more jobs than analysts expected, pointing to continuing weakness in the labor market. The unemployment rate rose to 4.5 percent from 4.4 percent in May</font>, the Labor Department reported, compared with <font color="#FF0000">Wall Street forecasts for a rate of 4.6 percent</font>.

The economy lost 114,000 non-farm jobs last month versus forecasts for a loss of only 40,000. The economy created a revised 8,000 non-farm jobs in May.

<font color="#FF0000">"It's really not as atrocious as you might think,"</font> said Anthony Chan, chief economist with Banc One Investment Advisors. <font color="#FF0000">"Amid all this weakness, you're seeing some groping that shows that, maybe in a month or two, we'll see some stability."</font>

Especially encouraging, Chan said, was the fact that the unemployment rate rose only one-tenth of a percentage point, despite the fact that the U.S. labor force -- Americans who are employed or looking for work -- rose by 82,000 people.

<font color="#FF0000">U.S. companies have cut hundreds of thousands of jobs since the beginning of the year, trying to stay profitable during an economic slowdown.</font>

The Federal Reserve, the U.S. central bank, has slashed short-term interest rates six times this year in an effort to keep consumers spending and avoid a recession. Friday's data may encourage them to cut rates one more time.

"What these numbers tell you is that the lull between the time the Fed stops easing and the time they start raising rates will probably be a little longer than the market thinks," Chan said."The economy is not likely to recover with a bang, but rather slowly."


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