U.S. Employers Added Just 69,000 Jobs in May, Fewest in a Year

Jobs report for MayBy CHRISTOPHER S. RUGABER

WASHINGTON -- The U.S. economy suddenly looks a lot weaker.

U.S. employers created only 69,000 jobs in May, the fewest in a year, and the unemployment rate ticked up.

The dismal jobs data will fan fears that the economy is sputtering. It could also damage President Barack Obama's re-election prospects. And it could lead the Federal Reserve to take further steps to help the economy.

The Labor Department also said Friday that the economy created far fewer jobs in the previous two months than first thought. It revised those figures down to show 49,000 fewer jobs created. The unemployment rate rose to 8.2% from 8.1% in April, the first increase in 11 months.

Dow Jones industrial average futures, which were already down 100 points before the report, fell an additional 100 points within minutes of its release.

The yield on the benchmark on the 10-year Treasury note plunged to 1.46%, the lowest on record, suggesting investors are flocking to the safety of U.S. government bonds.

The price of gold, which was trading at about $1,550 an ounce before the report, shot up $30. For much of the past three years, investors have seen gold as a safe place to put their money during turbulent economic times.

Josh Feinman, global chief economist with DB Advisors, said the report raises the likelihood that the Federal Reserve will do more -- perhaps start another round of bond purchases to further lower long-term interest rates.

Still, he noted that the rate on 10-year Treasury notes is already at a record low.

"How much lower can long-term rates go?" Feinman said.

The economy is averaging just 73,000 jobs per month over the past two months -- roughly a third of 226,000 jobs created per month in the January-March quarter.

Mitt Romney, Obama's Republican challenger, has made the economy the central theme of his campaign. No president since the Great Depression has sought re-election with unemployment as high as 8.2%, and past incumbents have lost when the unemployment rate was on the rise.

Republicans wasted little time seizing on the bleak report.

"Today's extremely troubling jobs report proves yet again that President Obama's policies simply are not working and that he has failed to live up to the promise of his presidency," said Republican National Committee Chairman Reince Priebus.

There are signs business confidence is waning. Companies have cut their spending on computers and machinery for two straight months, goods that signal investment plans. And some regional surveys suggest the factory activity is expanding at a slower pace.

Consumers are also more downbeat about the economy, according to a May survey from the Conference Board. That could lead more Americans to cut back on spending, which drives 70% of economic growth.

Construction firms cut 28,000 jobs, the steepest drop in two years. Professional services, government, hotels, restaurants and other leisure industries also lost jobs.

Not all industries cut jobs. Manufacturers added 12,000 jobs. Transportation and warehousing created nearly 36,000. Education and health care added 46,000.

In one of the few positive signs, more people began looking for work last month, but not all found jobs. The increase drove the number of unemployed to 12.7 million, which pushed up the unemployment rate slightly. The government doesn't count people as unemployed unless they are actively looking for work.

Most of the report was disappointing. The average work week was shortened to 34.4 hours, which suggests companies are seeing less consumer demand.

The average hourly wage ticked up two pennies, to $23.41. It has increased only 1.7% in the past year, trailing the rate of inflation.

Businesses are facing a growing threat from Europe's financial crisis, which has worsened in recent weeks. The crisis is driving up borrowing costs for Spain and Italy and spreading to the banking system. Greece could be forced to exit the euro, which could push the region into a sharp recession. That could limit U.S. growth.

"It is disappointing," said Ellen Zentner, an economist at Nomura Securities. "Clearly, business sentiment has turned sour. ... Companies are concerned about contagion from Europe."

Zentner said mild winter earlier this year accelerated some hiring that normally would have taken place in the spring. The construction industry, one of the most weather-sensitive industries, added jobs in December and January but cut back sharply in April and May.

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imalibnow2

Maybe Socialists should shove it. Don't make me pay for your healthcare.
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You're on medicare, which means, that we are paying your health care cost.

June 01 2012 at 5:09 PM Report abuse rate up rate down Reply
Michael

Not all industries cut jobs. Manufacturers added 12,000 jobs. Transportation and warehousing created nearly 36,000. Education and health care added 46,000.
this is bullshit this country is falling apart do to the communist in the white house

June 01 2012 at 2:41 PM Report abuse rate up rate down Reply
Gumby

We eat too much sugar and it will mean soaring Medicare costs.. we will be paying through our noses for health services with baby boomers now coming home to roost... All the more reasons to tell capitalists to shove it.

June 01 2012 at 11:33 AM Report abuse -1 rate up rate down Reply
1 reply to Gumby's comment
Matt

It's government subsidies to corn crops that make sugar cheap enough to be in everything. If free market capitalism were actually allowed to operate, your deli meat and bacon wouldn't have sugar in them. Also, parents may choose to buy the broccoli instead of the doritos if the doritos weren't so much cheaper because of the subsidies.

June 01 2012 at 1:05 PM Report abuse rate up rate down Reply
Gumby

Some industries are diligiently working hard for little profits while other industries think they must have excessive profits and pigheaded shareholders or forget all about it. So much inequites around.. Times is hard now so jobs has to come first .. Not only that.. we just cannot keep on fouling up air more.. There is limits on Earth that we can do that.. Earth already sent messages that enough is enough... do it differently now.. even if it means hurting profits. so be it.. Captialists just cannot think they can abandon anything not worth the meager profits.. anymore.. We are already past capitalism.. Capitalism is good and we have to build on capitalism.. with soemthing new and diffferent if not more enlightening!

June 01 2012 at 11:31 AM Report abuse rate up rate down Reply
Gumby

It is apparent to me that employers are looking more closely to energy prices and the futures in oil prices to avoid further economic disruptions from higher oil prices.. We are starting to manage energy consumptin more aggressively now.. We thought we did all we could but there is still so muchmore to do to reduce dependence on energy too much. For now, we still dont think that solar energy is competitive enough, well it means that we cannot hire more until we realize that solar energy is critical to economic growth.. People are too profit oriented to stop and think about jobs.. Sometimes, you have to forego excessive profits for sake of creating jobs and happy workers..

June 01 2012 at 11:27 AM Report abuse rate up rate down Reply
maloontransllc

No one on wall st or WA DC wants to admit that when the price of energy gets this high it takes the wheels off the economy.. Well just maybe they will see it now and will most likely cost Obama his Job. His team of economists needs to be fired. And he says Romney is out of touch... I think they both are !!

June 01 2012 at 11:23 AM Report abuse +3 rate up rate down Reply
1 reply to maloontransllc's comment
chris1011

Price of energy has been going down bigtime. Natural gas is a glut on the market now, and the price is a fraction of what it was just a few years ago. This is also affecting the price of oil. Also, since the world is in low growth mode, especially China and Europe, the consumption of oil is slowing, and the price is dropping.

June 01 2012 at 11:29 AM Report abuse -4 rate up rate down Reply
Mingo

The numbers really do not tell the FULL truth . They forget tho tell you that the people that no longer can collect unemploment checks are not counted .Many of the cities in america are reporting over 23% unemployment and its getting worse Last week all the high tech companies said there will be major cut backs and that many more jobs may also be shipped off shore If 69,000 got hired (summer jobs) a lot more must of lost their jobs to make the rate go up How many of those jobs were illegals that were hire ? This administrtion has NO answers to what the problems are and as soon as obama care goes in to being the tax rate will sky rocket and many many more jobs will be lost

June 01 2012 at 11:01 AM Report abuse -2 rate up rate down Reply
1 reply to Mingo's comment
chris1011

What tax rate will skyrocket, Mingo? Are you pulling stuff out of your azz?

June 01 2012 at 11:22 AM Report abuse rate up rate down Reply
cpo1514

Atta boy Barry..... destroying America one job at a time for the past 3 1/2 years. So much for the HOAX & BLAME???

June 01 2012 at 10:32 AM Report abuse rate up rate down Reply
fielectric

Our population is growing by about 3 million per year and has since the immigration law was changed in 1965.
We are accepting four times more than we did in 1965. At a 3 Million per year growth rate, assuming that 50% need to work to support themselves; we need to create 125,000 jobs per month just to keep even.
Since we can't seem to do that, we should limit new immigration until unemployment drops to 4% or lower.

June 01 2012 at 10:14 AM Report abuse +2 rate up rate down Reply
1 reply to fielectric's comment
cpo1514

fleece

Or we could deport all non US citizens in the White House???

June 01 2012 at 10:33 AM Report abuse +2 rate up rate down Reply