President Barack Obama on Friday cast the state of the US economy in upbeat terms, declaring that it was headed in the right direction even as employers slashed payrolls last month for the first time in half a year. The unemployment rate dropped to 9.5 percent. “To every American who is looking for work, I promise you we're going to keep on doing everything that we can,” Obama said. “I will do everything in my power to help our economy create jobs and opportunities for all people.” To that end, Obama announced the latest burst of taxpayer-financed stimulus spending, a nationwide project to expand broadband access in places with little or no reliable Internet service. The president said it would create 5,000 construction jobs in the short term and ultimately benefit “tens of millions” of people. Overall, the president said the economy is on the right path. “We're not headed there fast enough for a lot of Americans,” Obama said. “We're not headed there fast enough for me, either.” The new report out Friday suggests businesses are still slow to hire amid a weak economic recovery. The net job loss was driven by the end of 225,000 temporary jobs for the 2010 US Census; private sector hiring was up a modest amount. Obama emphasized that point, saying private hiring was up for the sixth straight month. The overall civilian unemployment rate fell to the lowest level since July 2009, but the rate actually looked better than it was. The rate dropped in large measure because some 652,000 people gave up on their job searches and left the labor force - and thus were no longer counted as unemployed. The president sought to put the report in perspective, comparing June's more moderate numbers to the staggering pace of monthly job losses that were occurring as he took office. All told, 14.6 million people were looking for work in June. Obama spoke right before flying to West Virginia for a memorial service for Sen. Robert Byrd. Meanwhile, orders to US factories declined broadly in May after nine straight months of gains, raising new concerns that the recovery is stalling. The Commerce Department said Friday that orders for manufactured goods decreased 1.4 percent in May. It was the biggest drop since March 2009. Excluding the volatile transportation sector, orders fell 0.6 percent. That number fell 0.7 percent in April, the worst showing in 13 months. Overall orders in April grew a revised 1.0 percent. Orders for big-ticket durable goods were down 0.3 percent, after a 2.0 percent increase in April. Electronics and commercial aircraft were among the weakest performers. Demand for those goods expected to last less than three months fell 2.1 percent. Lower gas prices were partly to blame. But there were significant losses for makers of clothing, drinks and tobacco, and chemical products. The overall decline in orders was bleaker than the 0.5 percent drop expected by economists surveyed by Thomson Reuters. The factory orders report followed a disappointing jobs report released earlier Friday. Employers cut 125,000 jobs, the most since October, the Labor Department said. That was dragged down by the loss of 225,000 temporary census jobs. Businesses added a net total of 83,000 jobs, better than May but not enough to speed the recovery. Manufacturing has been a rare bright spot, helping lead the country out of recession with increased hiring and productivity. However, economists fear joblessness and less demand for exports could sap the sector's strength in the coming months. Some analysts pointed to strong spending by businesses as an indication that manufacturing will keep its momentum. Non-defense capital spending excluding aircraft was revised higher to a healthy 3.9 percent, indicating that many businesses expect the economy to keep growing.
