Unemployment Rate Jumps to 6.4% in June

Companies eliminated 30,000 jobs during June, pushing the jobless rate to a nine-year high of 6.4%, the Labor Department reported Thursday.

June was the fifth straight month the U.S. economy lost jobs. A revised 70,000 jobs were lost in May, Labor said.

Labor also said manufacturers lost 56,000 jobs last month, the 35th straight decline. Since a recent peak in July 2000, factory employment has fallen by more than 2.6 million to 14.7 million.

The manufacturing workweek held at 40.2 hours and overtime was unchanged at 4 hours.

Since employment levels drive so much economic activity, an increase in unemployment can hurt consumer confidence and spending patterns, which affect trucking demand.

Labor also said Thursday that new claims for jobless benefits rose 21,000 to 430,000 in the week ended June 28.

A Labor official said the number of new claims is typically volatile this time of the year because of the varied end to the school year across the country. The four-week moving average, considered a better indicator for jobless claims, fell 4,000 to 425,000.

Overall, the economy has lost 394,000 jobs since the end of January. Economists were expecting the June unemployment rate to increase only to 6.2%, Bloomberg reported.

Employment in service-producing industries rose 10,000 last month after falling 54,000 the previous month. Average weekly hours worked for all employees held at 33.7 hours.

On a positive note, many economists said that unemployment would peak with this report, Bloomberg said. The jobless rate is forecast to average 6.1% in the third quarter before falling in the final three months of 2003 to 6%.

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