U.S. economy sheds 125,000 jobs; unemployment falls to 9.5 percent

WASHINGTON (AP) -- A wave of federal census layoffs cut U.S. payrolls in June for the first time in six months, while private employers added a modest number of jobs. The unemployment rate fell to 9.5 percent, its lowest level in almost a year. The unemployment rate for African-Americans dropped from 15.5 in May to 15.4 this month.

Employers cut 125,000 jobs last month, the most since last October, the Labor Department said Friday. The loss was driven by the end of 225,000 temporary jobs for the 2010 U.S. Census. Businesses added a net total of 83,000 workers, an improvement from May. But that's also below March and April totals.

The country has 7.9 million fewer private payroll jobs than it did when the recession began.

Analysts expected private payrolls to rise by about 110,000, according to Thomson Reuters. The report indicates that businesses are still reluctant to hire as the economy slowly recovers form the worst recession since the 1930s.

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The unemployment rate fell as 652,000 people gave up on their job searches and left the labor force. People who are no longer looking for work aren't counted as unemployed.

All told, 14.6 million people were looking for work in June. Counting those who have given up their job searches and those who are working part time but would prefer full-time work, the underemployment rate edged down to 16.5 percent from 16.6 percent in May.

Copyright 2010 The Associated Press.