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Employers nationally cut 467,000 jobs in June and the unemployment rate climbed to a 26-year high of 9.5 percent, while in Utah new claims for unemployment benefits remain elevated and the jobless rate could be as high as 5.8 percent when officially tabulated.
Workers in the U.S. also saw weekly wages fall, suggesting Americans will have little appetite to spend and that the economy's road to recovery will be bumpy, according to a Labor Department report released Thursday.
Even as the recession on many fronts flashes signs of easing, companies might want to keep a lid on costs and be wary of hiring until they feel certain things are on solid ground, the report said.
In response, major stock indexes fell more than 2.6 percent Thursday, pushing down the Dow Jones industrials more than 220 points to their lowest level in six weeks.
June's payroll reductions were deeper than the 363,000 that economists expected, and average weekly earnings dropped to the lowest level in nearly a year.
"As the economy improves, you are going to have some setbacks, and this is probably one of them," said Mark Knold, chief economist at the Utah Department of Workforce Services. "But it also shows we are not out of the woods by any means yet. A lot of layoff decisions are still being made."
Still, the rise in the unemployment rate from 9.4 percent in May wasn't as sharp as the expected 9.6 percent, though many economists predict the jobless rate will hit 10 percent this year, and keep rising into next year, before falling back.
All told, 14.7 million people were unemployed in June.
If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the U.S. unemployment rate would have been 16.5 percent in June, the highest on records dating to 1994.
"We were on the road of things getting less bad in the jobs market, and that has been temporarily waylaid," said
In Utah, new claims for unemployment benefits are still too high, Knold said, a signal that the state's economic slide has not reached bottom. New claims have been running around 3,000 per week for the past month, down from a peak of 5,300 in January. Even so, the number of claims is about three times higher than normal.
"They were slowing down, but then they stopped slowing down. They are still at a level where they are harming the economy," he said.
A Creighton University index of business conditions in Utah and two bordering states improved in
Creighton's index for Utah advanced to 40.3, up from May's 37.5 and April's record low of 32.7.
On a bright note, a survey of information technology hiring managers in Utah showed that 34 percent expect to make hires in the next six months, up from 8 percent six months ago. The survey was conducted by ConsultNet, a technology and engineering staffing provider based in Sandy, and had a margin of error of 8.3 percent.
Since the recession began in December 2007, the economy has lost a net total of 6.5 million
The average workweek in June fell to 33 hours, the lowest on records dating to 1964.
There was some other encouraging job news Thursday. In a separate report, the Labor Department said the number of newly laid-off workers filing applications for unemployment benefits fell last week to 614,000, in line with economists' predictions. The number of people continuing to draw benefits unexpectedly dropped to 6.7 million.
On another front, the Commerce Department said orders placed with U.S. factories rose 1.2 percent in May, the most in 11 months. The increase also was better than economists expected.
