US employers hiring just 18,000 people in June, dampening hopes the US economy was starting to regaining momentum.
That was the fewest number of workers taken on since September last year and well below economists’ expectations for a rise of 90,000.
The figures for May were revised down to just 25,000 from the previous estimate of 54,000.
The average work week and earnings also slipped.
The jobless rate – which is derived from a separate survey of households – went up to 9.2 percent of the workforce from May’s 9.1 percent.
The figures are a major blow for the Obama administration with jobs likely to be a major issue in next year’s election.
President Obama said: “Today’s job report confirms what most Americans already know, we still have a long way to go and a lot of work to do to give people the security and opportunity they deserve. The problems in Greece and in Europe, along with uncertainty over whether the debt limit here in the US will be raised, have also made businesses hesitant to invest more aggressively. The economic challenges that we face were not created overnight and they are not going to be solved overnight.”
The figures are in stark contrast to recent data on retail sales and manufacturing that had shown activity starting to perk up.
The problem is people who are out of work do not spend so much, keeping the economy from expanding to regain the more than eight million jobs lost in the US during the recession.