Unemployment Rate, Payrolls Fall in June

The U.S. unemployment rate dropped to 9.5% in June, though payrolls fell for the first time this year, the Labor Department said Friday.

Employers eliminated 125,000 jobs, due largely to the government cutting 225,000 temporary census workers, Bloomberg reported.

Economists had forecast a decline in payrolls of 130,000, while the unemployment rate was forecast to rise to 9.8% from 9.7% in May.

The job cuts followed a revised rise of 433,000 in May payrolls, slightly higher than what was originally reported.

Employment at companies grew 83,000, Bloomberg said.

Factory payrolls grew by 9,000 jobs, the smallest gain this year. Construction jobs dropped by 22,000, following a 30,000 decrease.

Service industries cut 117,000 workers following a 420,000 gain in May.