WASHINGTON - U.S. job growth slowed sharply in June as employers cut the pace of new hiring after several months of robust gains and trimmed the workweek, the government reported on Friday.
With elections four months away, President Bush sought to defuse potential worry by saying, in a speech to small business owners, that the economy was growing steadily, and pointed to the 1-1/2 million jobs created since last August as proof.
The Labor Department earlier reported that 112,000 jobs were created last month, less than half the 250,000 that Wall Street analysts forecast. The figure, which sent tremors through financial markets, still meant a 10th straight month in which payrolls grew.
"We're witnessing steady growth, steady growth," Bush said in the speech at the White House. "We don't need boom-or-bust type growth. We want just steady, consistent growth so our fellow citizens will be able to find a job."
Democratic critics quickly weighed in to claim the jobs data showed the Bush administration was not doing enough to broaden Americans' job opportunities.
"The President has the worst record of job creation since the Great Depression, and his policies have instigated record budget deficits and exploding debt that will haunt us for a generation to come," said Steny Hoyer, Democratic Whip in the U.S. House of Representatives.
CONTRAST IS STRIKING
The June job figures were especially striking after three months of very strong payrolls growth. The data drove down stock prices and the dollar's value, but analysts said it didn't necessarily mean slowing economic growth and might help restrain interest-rate rises.
Bond yields fell, an indication that investors thought interest rates might not be going up as sharply in future as thought previously.
April and May new-job totals were revised down, to 324,000 and 235,000 respectively, from 346,000 and 248,000. There were 353,000 new jobs created in March.
June's unemployment rate was unchanged, as expected, at 5.6 percent.
So far in 2004, some 1.3 million jobs have been created, which U.S. Treasury Secretary John Snow pointed to as a sign that economic recovery was solidly entrenched. "I think the numbers indicate that the recovery is continuing," Snow said in one of a series of interviews that amounted to a media blitz to seek credit for the administration from the jobs growth.
SHRINKING WORK WEEK
But there were some signs of broader weakness, including a decrease in the average workweek to 33.6 hours from 33.8 in May, the shortest since a matching level in December. The manufacturing sector lost 11,000 jobs, a reversal after four straight months in which factories added jobs after years of decline.
"This pace of job creation shows there is still slack in the labor markets. The bottom line is that this is the type of number that will allow the Fed to continue its tightening at a measured pace," said Alex Beuzelin, a foreign exchange market analyst with Ruesch International in Washington.
The U.S. central bank raised official interest rates a quarter percentage point on Wednesday, its first such action in four years.
Economist Joel Naroff said that while job growth had sputtered in June, it did not necessarily signal a continuing decline. "I expect monthly payroll increases to be in the 225,000 to 250,000 range for the rest of the year, which is good but not great," Naroff said.
Stock prices remained soft after the report, with the Dow Jones industrial average off more than 50 points at midday and the Nasdaq composite index down about 10 points.
Bond prices leapt higher, with the 30-year U.S. Treasury bond up more than a full point and its yield -- which moves in the opposite direction to prices -- down to 5.21 percent. The bellwether 10-year note was ahead nearly a point to yield 4.46 percent.
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