Jobless Report Shows Rebound Has Weakened; Unemployment Rate Swells to 5.9%
Unemployment rose and job growth was slight in June, the Labor Department reported yesterday, providing new evidence that an economic recovery that roared to a start early in the year has stalled.</br></br>Joblessness rose to 5.9 percent last month, from 5.8 percent in May. The nation added 36,000 jobs but analysts had expected a gain of 75,000, and there still were 1.4 million fewer jobs than in June 2001.</br></br>To many economists, the report suggests that the slumping stock market and corporate scandals of the past six months are making companies reluctant to hire -- bad news for the 8.4 million Americans who were looking for work last month.</br></br>"Businesses are reluctant to become aggressive and expand again," said Mark Zandi, chief economist of consulting firm Economy.com Inc. "The economy is treading water." "Clearly, the tremendous setbacks in the stock market have spooked businesses," said Sung Won Sohn, chief economist of Wells Fargo & Co.</br></br>By the reckoning of most economists, the recession ended in December. Indeed, stunning growth in economic output in the first quarter of this year boosted hopes that a quick recovery was underway. But seven months into the year, many businesses are finding the recovery to be tepid -- and, as a result, aren't hiring more people.