() New York – June US payrolls dropped 125,000, the most job cuts since October, but the downturn in payroll figures was due to government layoffs of census workers.  Businesses actually added 85,000 positions while the government laid off 225,000 to place the June unemployment rate at 9.5%, 0.02% lower than May’s 9.7% rate.

Setting aside the 225,000 temporary jobs created by the census, job pundits at large were expecting to see about 110,000 jobs added to payrolls in the private sector in June, so while only 85,000 jobs where added, the results are still below market expectations.

Weakness in the job market added to Friday’s downturn in the stock market with the Dow down nearly 17 points at 9,715.

Adding to the job woes, factory orders in May were down 1.4%.  Less the more-volatile transportation sector, factory orders in May fell 0.6%, compared to a 1.0% increase the prior month.  If you factor in the recent sharp decline in consumer confidence it could mean fewer jobs ahead in the manufacturing sector as employers take a ‘wait and see’ approach toward the US economy.

If you factor in the number of people who’ve been displaced since the recession began along with population growth, the job market would need to create 7.9 million jobs just to return to pre-recession levels.

Lawmakers in Washington are battling over an extension of unemployment benefits with Republicans unwilling to accept the bill as presented by Democrats.  Government labor sources say if those out of work Americans don’t receive another extension of unemployment benefits as many as 3.3 million workers will be without financial aid.  That could mean a surge in jobless Americans who just give up looking for work while at the same time it would create a false downturn in the nation’s unemployment rate.

Thursday, the House of Representatives voted 270-153 to restore benefits for more than 1 million people whose payments ran out in early June.  The bill is now stalled in the Senate.  Senate Republicans object to the deficit spending.  Massachusetts Senator Scott Brown introduced his own compromise bill late Wednesday that would use funds from the leftover $37 billion in stimulus funding to fund unemployment extension benefits and Medicaid, though tagged onto Brown’s legislation is $600 million for Massachusetts Medicaid costs.

Sen. Brown said, “My compromise bill uses unspent stimulus funds and cuts wasteful and unnecessary spending in other areas to pay for these important programs.”

States provide up to 26 weeks of unemployment insurance benefits for jobless workers. Federal aid in response to the weak economy has extended payouts for up to 99 weeks in the states hardest hit by unemployment.

By July 3, 1.7 million unemployed workers will lose state unemployment benefits, according to estimates by the US Department of Labor.  If emergency benefits are not provided by Congress by the end of July, that figure will exceed 3 million.

California will be hardest hit, seeing 500,000 unemployed workers lose their benefits if Congress doesn’t act.  In Florida, New York and Pennsylvania, 200,000 workers could lose their benefits.

It is expected that lawmakers will not take up unemployment emergency funding until the full chambers return on July 12th.

The stalling tactic of Republicans may be aimed not at the deficit but at Democrats who are up for re-election this fall.  Both skyrocketing federal spending and the weakness in the US economy are being used by lawmakers on both sides of the Isle in Washington in trying to win voter support.  Yet their actions are considered to be at the expense of voters themselves according to political action groups such as the Tea Party, who’ve backed a growing number of new faces on the State level who are showing gains in popularity at the polls.  In turn, old school politicians are losing their seats, though regardless of how that turns out, out of work Americans are struggling to find jobs and support their families at the same time.

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