Job Growth Slowed To 112,000 In June, Half Of Expectationsp; Jobless Rate Remains 5.6%; Report is latest evidence of a deceleration in Q2; rate hikes now less likely.(A)

Byline: JED GRAHAM

The economy added 112,000 jobs in June as hiring unexpectedly slowed after a three-month surge, the Labor Department reported Friday.

Following weaker-than-expected readings on consumer spending and durable goods orders, the jobs report provided fresh evidence that economic growth has moderated, at least temporarily.

Economists said high gasoline and other energy costs along with rising interest rates might have curbed growth. Energy costs and market rates have cooled in recent weeks.

Wall Street, which had expected a 250,000 rise in payrolls, responded with conviction that the Federal Reserve will be able to keep raising rates at a measured pace. The yield on the 10-year Treasury slid 11 basis points to a two-month low 4.46%. Stocks fell modestly.

"The general tone of (recent) reports has been softer than anticipated," said Nigel Gault, U.S. research director at Global Insight. "Perhaps the economy doesn't have quite as much momentum behind it as it appeared to have."

Gault noted a single month of mediocre hiring after three great months doesn't make a trend. "I would start to get concerned if we continue to see numbers like this for several months," he said.