US unemployment stayed stubbornly stuck at 8.2% with only 80,000 new jobs added in June, dealing a potentially damaging blow to Barack Obama in the run-up to November's White House election.
The US bureau of labor statistics, in a jobs report published Friday, said the unemployment situation was "essentially unchanged" from the previous month, with unemployment at 12.7 million.
The Republicans seized on the figures to say Obama's attempts to stimulate the economy over the last three and a half years had failed.
Obama, campaigning in Ohio on Thursday, argued that he had inherited the worst recession since the Great Depression, and that it takes time to turn an economy around.
The disappointing figures had been eagerly anticipated by both the Obama and the Mitt Romney campaigns, each knowing that they will colour voters' views on the economy in the run-up to the election.
Delving deeper into the figures, the unemployment rate for whites and Latinos is unchanged, but unemployment among black Americans has risen, to 14.4%.
About one-third of the jobs gained in June were in temporary services. Manufacturing added 11,000, its ninth straight month of gains. The healthcare sector added 13,000 jobs and financial services gained 5,000. Retailers, transportation firms and the government all cut jobs.
Markets fell after the statistics were released at 8.30 am ET, though only modestly.
The bad jobs figures are deflating to the Obama campaign, which has enjoyed a few good weeks, in particular after the supreme court upheld his signature healthcare reforms. The news provides Romney with an opening to shift the debate back to Obama's record on the economy, the issue that polls show voters care most about.
The Republican House speaker, John Boehner, seized on the figures as evidence that Obama's stewardship of the economy had failed. "Today's report shows the private sector clearly isn't 'doing fine' and that President Obama's policies have failed. The president bet on a failed 'stimulus' spending binge that led to 41 months of unemployment above 8%," he said.
Analysts had anticipated an increase of at least 95,000 new jobs, a fairly modest target. But the figures were even lower than that.
The average of 75,000 new jobs created in April, May and June contrasts badly with the 226,000 new jobs created in January, February and March this year.
The one good piece of news in the figures for Obama was a slight increase in the number of professional and business jobs in June.
June 's figures came after similar modest rises in April and May. The figures for April were revised up and the figures for May down by the bureau of labor statistics Friday, basically cancelling each other out.
US stock markets fell on the latest announcement. The Dow Jones industrial average sunk more than 124 points to 12,772.47 by the close, wiping out gains made earlier in the week.
Bourses across Europe and the US took a hit. In London, the FTSE 100 index closed down 30 points at 5662.6, while in France and Germany, the Cac 40 and Dax dropped 1.9% respectively.
The US's benchmark index faired no better. In early trading, the Dow Jones slumped some 186.41 points to 12,702.99.
It rallied a little, but not enough to avoid a triple digit hit. By closing bell it was off 124.20 points, knocking just under 1% off share value. The Standard & Poor's 500 was down 12.89 points, or 0.94%, while the Nasdaq composite index was off 1.3% at 2,937.33.
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