Weak employment report: 125,000 workers lost jobs in June

The stock market appeared headed toward a modestly higher opening Friday following a third straight report of weak job growth.

Stock index futures gave up modest gains and fluctuated after the government said private employers increased their hiring
slightly last month, but not as fast as expected. Interest rates fell slightly after the weak jobs data.

The Labor Department said private employers added 83,000 jobs last month. That's less than the 112,000 economists had
forecast private employers would add. On Wednesday, payroll company ADP's monthly report on private employment also fell
short of expectations, helping to send stocks lower.

Investors have focused on private employment in recent months because headline numbers have been skewed by the hiring and
firing of temporary census workers. Also, private workers account for the bulk of the country's labor force.

The government cut 225,000 census jobs in June. Overall, 125,000 workers lost their jobs last month, worse than the 110,000
forecast by economists polled by Thomson Reuters.

Traders have been concerned in recent weeks that the pace of the economic recovery is not as quick as they had hoped. That's
primarily because of the weak labor market. High unemployment has kept consumers' confidence low and retail sales from
growing rapidly. Consumer spending accounts for the largest portion of the nation's economic activity. Until employers
accelerate the pace of hiring, the economy is expected to grow only modestly.

John Silvia, chief economist at Wells Fargo Securities, said that while the report indicates the economy might not be robust,
it is still improving. He noted hiring in the private sector was small, but diverse across many industries from manufacturing
to health care.

"It says to me you have economic growth," Silvia said. "It's sustained."

The unemployment rate did fall unexpectedly, dropping to 9.5 percent. Economists polled by Thomson Reuters had forecast it
to rise to 9.8 percent. The unemployment rate is calculated from different statistics than the net job cuts, which is why
the unemployment rate can fall even if more people lose jobs in a month.

Ahead of the opening bell, Dow Jones industrial average futures rose 29, or 0.3 percent, to 9,691. Standard & Poor's
500 index futures rose 3.20, or 0.3 percent, to 1,025.00, while Nasdaq 100 index futures rose 7.00, or 0.4 percent, to 1,735.00.|

Pessimism has been growing among investors in recent days about the health of the jobs market and economy as a whole. The
Standard & Poor's 500 index has fallen the last two days after the surprising ADP report and an unexpected rise in
initial jobless claims. The S&P 500 is down in eight of the last nine trading sessions, falling 8.1 percent during that
time.

Meanwhile, prices rose in the Treasury market Friday after the jobs report, a further indication that investors remain unsure
about the health of the economy and are looking for safe investments.

The yield on the 10-year note, which moves opposite its price, fell to 2.93 percent from 2.95 percent late Thursday. Its
yield is used as a benchmark for interest rates on many consumer loans and mortgages.