US unemployment rises on stagnant job creation

WASHINGTON — US unemployment climbed to 9.2 percent as job creation stalled in June, official figures showed, posing new challenges to the Obama administration's efforts to rev up economic growth.A much-awaited Labor Department report showed a second month in a row of virtually no improvement, jobs-wise. The economy generated a paltry net 18,000 positions in June, after just 25,000 in May.The data, which showed 14.1 million Americans still jobless two years after the 2008-2009 recession ended, was uniformly seen as bad news for the government of President Barack Obama as Republican opponents challenge his economic record heading into elections next year.It also came as the White House and congressional leaders were locked in talks on slashing government spending, necessary to close a yawning deficit but which economists say could further curtail growth if too precipitous."Our economy as a whole just isn't producing nearly enough jobs for everybody who's looking," Obama admitted after the jobs figures came out."The sooner we have a plan to deal with the deficit, the sooner we give our businesses the certainty they will need in order to make additional investments to grow and hire," he said.Expected to power up the economic recovery, the private sector added just 57,000 positions last month -- compared to 241,000 in April.Offsetting that were steep layoffs by federal, state and local governments as they slash payrolls to address budget deficits.Added together, May and June paint a picture of both extremely slow growth in the economy and a reticence by businesses, many of which have been piling up cash reserves, to expand their workforces.US stock markets sank on the data, with the Dow Jones Industrial Average closing down 0.5 percent for the day.Nearly all of the new jobs came from the service sector -- and those predominantly in health care -- despite hopes of a revival in US manufacturing to drive growth.In addition, the figures showed an erosion of incomes, at a time when higher prices have already been

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