Employment growth slows sharply in May
Case worker Jessica Yon discusses eligibility for unemployed people at a jobs center in San Francisco, California February 4, 2010. REUTERS/Robert GalbraithOn Friday June 3, 2011, 10:01 am
By Lucia MutikaniWASHINGTON (Reuters) - Employers hired far fewer workers than expected in May and the jobless rate rose to 9.1 percent, raising concerns the economy might be stuck in a painful slow-growth mode.
Nonfarm payrolls increased 54,000 last month, the weakest reading since September, the Labor Department said on Friday. Private employment rose just 83,000, the least since last June, while government payrolls dropped 29,000.
Economists had expected payrolls to rise 150,000 and private hiring to increase 175,000. The government revised employment figures for March and April to show 39,000 fewer jobs created than previously estimated.
The job creation slowdown confirmed the economic weakness already flagged by other data from consumer spending to manufacturing, and it stoked fears the economy could be facing a more troubling stretch of weakness than had been thought.
"There are plenty of reasons to expect the third quarter will be better. But the question is now becoming how much better?," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.
Economists had pinned the economy's sluggishness largely on high energy prices, supply chain disruptions stemming from Japan's earthquake and tornadoes and flooding in U.S. Midwest and South. The department said it found "no clear impact" from weather on the jobs figures.
The employment report provides one of the best early reads on the health of the U.S. economy and it sets the tone for global financial markets.
U.S. stocks opened lower, while Treasury debt prices added to earlier gains and interest rate futures rose, signaling that traders believe mounting signs of economic weakness will lead the Federal Reserve to maintain an ultra-easy monetary policy.
The dollar fell against the yen and Swiss franc.
The sharp slowdown in job creation is troubling news for President Barack Obama, whose chances of re-election next year could hinge on the health of the economy.
RECESSION BOUND?
Economists said the report did not suggest the economy was heading into recession, but they said job growth could prove frustratingly slow.
"It is likely that this will be a soft patch in the coming months but overall it will probably be a soft patch rather than a double-dip recession or something worse," said Sean Incremona an economist at 4CAST in New York.
The data lent more fuel to talk about the need for the Fed to extend its asset purchasing program when it expires this month, but officials at the central bank have set a high bar for any further easing of monetary policy.
With the Obama administration and lawmakers discussing how best to trim the U.S. budget gap, the economy could be left to its own devices.
"The government changed our flat tire in 2008 and now we're driving around without a spare," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
High gasoline costs hurt consumer spending in the first quarter, restricting economic growth to a 1.8 percent annual pace after expanding at a 3.1 percent rate in the October-December period.
The economy has regained only a fraction of the more than 8 million jobs lost during the recession. Economists say payrolls growth above 300,000 a month is needed to make significant progress in shrinking the pool of 13.9 million unemployed Americans.
The rise in the unemployment rate from 9.0 percent in April reflected discouraged workers who had been inspired by the pick-up in hiring in April re-entering the labor market.
"There is so much slack in the labor market it's going to take a long time to get the unemployment rate down to between 6 and 7 percent. That's going to take years," said Stephen Bronars, a senior economist at Welch Consulting in Washington.
BROAD-BASED WEAKNESS
The employment report showed weakness across the board, with the private services sector adding 80,000 jobs last month after increasing payrolls by 213,000 in April.
Within the private services sector, leisure and hospitality fell, showing no boost from McDonald's recruitment of about 50,000 new staff in April, which was after the survey period for that month's payrolls. Spring is traditionally a strong hiring period for McDonald's.
Retail employment, which recorded its largest increase in 10 years in April, fell 8,500 last month. Manufacturing payrolls growth contracted 5,000 last month, the first decline since October, while construction employment rose 2,000.
The report showed the average work week steady at 34.4 hours and few signs of wage inflation, with average hourly earnings rising 6 cents.
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0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentSchooner Report AbuseWhat's shocking is how Obama's clearly-irrational proclamations continue to be taken even remotely seriously by the small percentage of people who still 'support' him, at least at the polls.
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He makes these gargantuon, elaborate declarations and promises -- "we will not rest until..." "we will stay with you until the very end..." "I will not allow this to..." and so many more like those.
Meanwhile, observant people can easily see that Obama is making pure lies in public. He proclaimed over and over again, "we will not rest until..." and then he ran off to play golf, jet around the world, party in the White House, Beer Summit, more beer, martinis, more beer, on and on it goes.
Unemployment? He PROMISED in his campaign that if you voted for HIM, it'd never be higher than 8%. Never. Not gonna' happen. No way. Vote for him.
Now look.
We have a deluded dingbat in the White House with a booming voice who reads text well of a teleprompter and swears, he SWEARS, these elaborate promises that even he must know, if he's lucid, are unrealistic fantasy.- 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentWeMadeAmistake Report Abuse
In a recent press conference, Obama used 'invest', 'invested', 'investing', 18 times to describe deficit spending. Ya think this man is brilliant? Folks, face the truth. Obama is incompetant and a complete unadulterated phony. The only real thing he is, is that he is a narcissist and a liar. Impeach Obama.
Reply - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentPaul Report Abuse
The real unemployment rate is around 17% from people who are no longer eligible for unemployment benefits and have given up looking for a job. Those people are no longer counted as unemployed, but they still exist in very large numbers. Conveniently, the lame-stream media scum never mention that fact anymore.
Reply - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentconstruction Report Abuse
Rear Adm Mullen announced that they are now going to have to cut our military's pay and benefits due to cuts, yet barrack hussein obama is galavanting somewhere EVERY day to get away from the one place (White House that we already bought and paid for) that he wanted to be so bad, yet is never there....how about odummer stay put and 'communicate' via electronic means (that way they won't see his teleprompters) and save BILLIONS every time he goes somewhere and then maybe the ONE thing our U.S. Constitution DOES give the authority to do (our military) can have the funding it needs, better yet bring ALL our troops home (obviously we're not 'really' at war or we would be carpet bombing the hell out of the terrorists and getting the wars over)...let them come home and get rid of the terrorist cells that are ALREADY here on US soil and close our borders!
Reply - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentMary S Report Abuse
How's that stimulus workin' for you? And what about HOPE and CHANGE? Well, things have certainly changed since O took office.
Reply - 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentConstitution Party Report Abuse
Anyone that still believes the lies of the Obama administration is a complete and total fool !
Reply - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentKingHill Report Abuse
If this goofball gets re-elected, I can seriously see the Red states telling the Blue states to take a hike. Who wants to model California?
Reply - 2 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentSkep41 Report Abuse
8.9, 9.0, 9.1...It doesnt matter what phony numbers the Obamunists put out, they're lying through their teeth. People who sink into despair because they're over fifty and no one will hire them even for minimum-wage jobs...the minimum-wage jobs their college graduate kids are lucky to get...are no longer counted. They're 'discouraged workers' and not counted in these Obama Depression unemployment statistics. What a disgusting lie, truly worthy of a Democrat. These people yearn for a job to regain their self-respect after a thousand rejections that have told them they are totally worthless. We've had three years of Democrat insane spending, money-printing, crony-coddling and Stalinist anti-business regulating and these leftists have brought the greatest economy in the world to its knees. The Keynesian nonsense propounded by these left-wing morons has failed miserably and tens of millions of our fellow citizens are suffering because there are still people stupid enough to vote for Democrats. If you can ignore the slide to poverty and ruin that these deluded policies have caused and still vote for any Democrat for any office, no matter how much they lie about being 'moderates', then you are part of the problem. This Obama Depression is your depression.
Reply - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentA Yahoo! User Report Abuse
Yea! My (false) pro Obama comment made the top 10 most replied, the comments were not very nice but were quite entertaining....I think I have too much time on my hands....
Reply - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentWeMadeAmistake Report Abuse
Joe Biden - "This will be the summer of recover"! That was last summer folks. Ya think they are telling you the truth? Duh. Are you democrat Obama lovers out there enjoying your recovery? Are you better off than you were four years ago? Do you even still have a job? If you still have a job, you are very likely not going to have one by this time next year. Impeach Obama.
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