US job losses jump in June

US UNEMPLOYMENT jumped by more than expected in June, taking the jobless rate of the world&rsquo;s largest economy to 9.5 per cent, the highest in more than a quarter of a century.<br /><br />Non-farm payroll data, released yesterday, showed that US employers cut 467,000 jobs last month, significantly more than the 363,000 estimated, breaking four months of moderate job losses.<br /><br />The disappointing data, which was brought forward by a day because of today&rsquo;s US national holiday, renewed fears of an unsustainable economic recovery and markets scaled back expectations of monetary tightening by the Federal Reserve.<br /><br />ING&rsquo;s James Knightley said he still expects the US jobless rate to continue rising until the middle of 2010, peaking in the 11-11.5 per cent range. He says that historically the Fed has not moved until 12-18 months after the unemployment rate has peaked.<br /><br />The June figures may have appeared worse than they actually were due to an influx of school leavers into the job market and layoffs of temporary public sector workers. Knightley noted the initial jobless claims data, released at the same time, showed that the rate of lay-offs is slowing while continuing jobless claims fell again, which offers some hope that the decline in payrolls won&rsquo;t be quite as large next time.<br /><br />But the drop back in average weekly hours worked to a new low of 33.0, from 33.1, is a big concern, said Capital Economics&rsquo; Paul Ashworth because hours worked are often a good leading indicator of wider labour market trends. He added that the dip reflects the economic malaise rather than the impact of the GM bankruptcy.