New York: Employment fell in June for the first time this year, reflecting a drop in federal census workers as the decennial population count began to wind down, economists said before a report this week.

Payrolls declined by 110,000 last month, according to the median estimate of 51 economists surveyed by Bloomberg News ahead of a Labour Department report on July 2. Employment at companies rose for a sixth consecutive month, the survey showed.

The pace of hiring indicates it will take years for the world's largest economy to recover the more than 8 million jobs lost during the recession that began in December 2007. The turmoil in financial markets brought on by the European debt crisis raises the risk that employment will slow, depriving American households of the income needed to maintain spending.

"There is a sombre tone that's returned to the US economic outlook since the start of the European debt crisis," said Ellen Zentner, a senior US economist at Bank of Tokyo- Mitsubishi UFJ Limited in New York.

"Financial-market volatility makes businesses think twice about hiring. Spending will slow in the third quarter." The Census Bureau says it let go about 243,000 of the temporary workers who helped in conducting the population count from mid-May to mid-June. Peak census employment reached about 586,000 in early May, indicating additional cuts to come that will keep distorting the payroll figures for months.

For that reason, economists say private payrolls, which exclude government jobs, will be a better gauge of the state of the labour market for much of 2010. Employment at companies rose by 113,000 after a 41,000 gain in May, according to the median forecast of 29 economists surveyed.

The report will probably also show the unemployment rate rose to 9.8 per cent last month, according to the survey median, from 9.7 per cent.

Pace of recovery

Joblessness, which reached a 26-year high of 10.1 per cent in October, will take time to recede as the number of previously discouraged jobseekers returning to the labour force exceeds the number of available jobs.

Factory payrolls increased in June for the sixth straight month, according to the survey. Service providers have also been adding to headcounts this year.

Delta Air Lines Incorporated, the world's biggest carrier, will hire 700 airport ticket and gate agents to help handle increased summer traffic and operations disrupted by weather, Chris Kelly, a Delta spokeswoman, said June 18 in an interview. The additions are in addition to the 300 pilot and 300 reservation agent jobs recently filled by the Atlanta-based airline.

Manufacturers in the US are reaping the benefits of the global recovery. Deere & Company, the world's largest farm equipment maker, last month reported second-quarter profit that topped analysts' estimates and raised earnings and sales forecasts for a second time this year as demand improved.

Farm-machinery sales in the US and Canada will gain 5 per cent to 10 per cent for the year and South American farm-equipment sales are projected to jump about 25 per cent because of improvements in the Brazilian and Argentine markets, Deere said.

"Clearly the markets are improving and there's a lot of good news out of Brazil," Susan Karlix, a Deere spokeswoman, said May 19 on a conference call.