U.S. employers hired at a dismal pace in June, raising pressure on the Federal Reserve to do more to boost the economy and dealing another setback to President Barack Obama’s re-election bid.
The Labor Department said Friday that non-farm payrolls grew by just 80,000 jobs in June, the third straight month below 100,000.
Job creation was too weak to bring down the country’s 8.2 percent jobless rate and the report fueled concerns that Europe’s debt crisis was shifting the U.S. economy into low gear.
Last month, the Fed extended a program aimed at keeping long-term interest rates down and said it was prepared to do more to spur the economic recovery if needed.
The somber jobs report could move the central bank closer to a third round of so-called quantitative easing, or QE3.
Reuters polled 16 primary dealers — the large financial institutions that do business with the Fed — and found 12 expect QE3 by year-end, with eight expecting it either at the Fed’s next meeting, which wraps up Aug. 1, or its subsequent gathering in September.
“You could see something as early as next month,” said Brian Levitt, an economist at OppenheimerFunds in New York.
(SD-Agencies)
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