U.S. hiring outlook improves, but economy still weak

WASHINGTON — The outlook for the U.S. job market brightened a little Thursday after the government said fewer people applied for unemployment benefits last week and surveys of private companies showed hiring increased in June.

The economy is still far from healthy. U.S. service companies grew more slowly last month, and retail sales figures were disappointing. Central banks in Europe and China also cut their interest rates, an indication that they expect weaker growth ahead.

But despite all the gloom, American factories and service firms kept hiring in June. Economists said that suggests that many companies are less worried that the spring slump will endure.

“It is beginning to look like the labor market is not nearly as weak as feared,” Joel Naroff, chief economist at Naroff Economic Advisors, said in a note to clients.

The economy added an average of just 73,000 jobs a month in April and May, compared to the 226,000 a month that were added in the first three months of the year. And it’s far too low to reduce the unemployment rate, which rose to 8.2 percent in May.

Before Thursday, most economists didn’t expect much change from that pace. They forecast that employers added 90,000 jobs last month, while the unemployment rate didn’t change, according to a survey by Factset.