National unemployment rates continue to rise in June
July 5, 2001
WASHINGTON (AP) The nation’s unemployment rate rose to 4.5 percent in June as manufacturers continued to suffer heavy job losses and demand for workers in service industries fell to the lowest level in 10 months.
The Labor Department reported Friday that the jobless rate rose 0.1 percentage point from a 4.4 percent rate in May. The 4.5 percent level matched the unemployment rate in April, with both months representing the highest level the jobless rate has reached in the yearlong economic slowdown.
Businesses slashed payrolls for the second time in three months, cutting 114,000 jobs in June, after a reduction of 165,000 jobs in April. Payrolls had edged up by only 8,000 in May.
On Wall Street, the weak employment report, along with corporate warnings, added to investors’ anxiety. The Dow Jones industrials were down around 180 points and the Nasdaq was off around 64 points in morning trading.
To stave off recession, the Federal Reserve has cut interest rates six times this year. The most recent cut, by a quarter-point, came last week. Each of the other five were by bolder half-point moves.
”The data show the economy is still very weak and leave the door open for the Fed to cut rates again,” said Gary Thayer, chief economist at A.G. Edwards & Sons. ”We don’t think the Fed will move between meetings because with gasoline prices coming down and tax rebates starting to be mailed out … I think the Fed is going to be a little more cautious here.”
Economists are predicting that final figures will show that the economy barely grew in the recently ended April-June quarter. Still, many are hopeful that growth will begin to rebound this summer as the Fed’s credit-easing campaign and Congress’ tax-refund checks take hold.
Labor Secretary Elaine Chao called the economy stable and said it is ”poised to take off after tax-rebate checks begin to arrive at the homes of American taxpayers this summer and fall.”