August 4, 2014 / 5:25 PM / 3 years ago

UPDATE 1-Puerto Rico economic activity index dips in June

(Adds components of index)

NEW YORK, Aug 4 (Reuters) - A measure of economic activity in Puerto Rico fell for a eighteenth straight month in June as a decline in public sector jobs outweighed gains in key private sector indicators, the U.S. commonwealth’s Government Development Bank said on Monday.

Puerto Rico’s economic activity index fell 1.0 percent year-over-year in June. The GDB said the fall was due entirely to fewer public sector jobs. It said June 2014 was the first month since July 2012 in which cement sales, electricity generation, gasoline consumption and private employment all increased simultaneously on a year-over-year basis.

Puerto Rico is struggling to kick-start its sluggish economy. The island has a debt load of over $70 billion and is expected to start restructuring some of that in the coming months.

The “decrease in public sector employment was primarily driven by policy decision to reduce the fiscal deficit,” the GDB said in a statement. “Private employment increased by 0.8 percent on a year-over-year basis.”

The public payroll fell 6.5 percent year-on-year in June, representing 16,500 fewer jobs than the same period last year.

The private payroll in June, at 681,200, was the highest since June 2008, the GDB said. Still, total non-farm payrolls in June averaged 918,800, an annual decrease of 1.2 percent. Employment fell 1.3 percent during the 2014 financial year compared to the previous year.

The island’s other three key economic indicators, electric power generation, gasoline consumption, and cement sales, all showed year-over-year gains in June, the report said.

Cement sales showed their first annual increase since August 2012, rising 4.3 percent to 1.26 million bags in June. Gasoline consumption climbed 1.4 percent to 78 million gallons, while electric power generation totaled 1.8 billion kilowatt hours, an increase of 1.9 percent.

Puerto Rico’s benchmark general obligation bonds traded at 89.875 cents on the dollar on Monday, representing a yield of 9.089 percent. That was a slight decline in prices from Friday when the same bonds traded at 90 cents to yield 9.074 percent, according to Thomson Reuters data. (Reporting by Edward Krudy; Editing by Meredith Mazzilli and Andrea Ricci)

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