June 1, 2012
Today's jobs report revealed some shocking figures. U.S. employers added far fewer jobs than expected in May, causing some economists to question the status of the recovering economy and others to ask if problems in Europe are creating uncertainty.
According to CNNMoney, just 69,000 new jobs were added last month, the weakest addition for all of 2012. Economists surveyed by CNNMoney had predicted more than double that number -- some 150,000 for the month.
"It's an awful number," said Rick Meckler, president of Libertyview Capital Management, in Economy Watch on msnbc.com. "Not only is it awful in its numerical terms, it comes at a very skittish time in the markets because of the European crisis."
Contributing to the low jobs numbers were some 13,000 lost government jobs with 5,000 at the federal level, reported CNBC. Construction also reported losses of 28,000 while the hospitality industry dropped by 9,000. Gains were reported, however, and the largest of those -- 84,000 -- was in the service sector. Manufacturing also added 12,000 new jobs.
"Government is the lender and spender of last resort in this economy," said Doug Roberts, managing principal for Channel Capital Research, to CNBC. "There is no priming the pump, and as government stimulus wears off the economy starts to slow down again."
At the same time, jobs numbers for the past two months were revised to lower than initially reported -- dropping by 50,000 total. Additionally, the unemployment rate went up for the first time in 11 months, from 8.1 percent to 8.2 percent.
Some economists think that uncertainty in Europe over Greece and the stability of the Eurozone are partially to blame, notes Time Business. CNNMoney pointed out that the upcoming presidential election in the U.S. could also be contributing.
"Whenever uncertainty abounds, it's hard to open the floodgates on hiring," Ellen Zentner, senior economist at Nomura Securities, explained in CNNMoney. "I would expect to see anemic hiring persist over the next few months."
According to Time Business, economists have said that some 200,000 to 250,000 jobs need to be added each month for seven years for the U.S. economy to get back on track. Furthermore, CNBC pointed out that the nation's gross domestic product, which grew at just 1.9 percent the first quarter of 2012, also would need to be higher.
As CNNMoney reports, of the 8.8 million jobs lost during the recession just some 3.8 million have been recovered; some 12.7 million Americans are still unemployed.
"The economy is growing but it is not growing fast enough," said Alan B. Krueger, chairman of the Council of Economic Advisers, to CNBC. "There is much more work that remains to be done to repair the damage caused by the financial crisis and deep recession that began at the end of 2007."
Compiled by Maggie O'Neill
"May Jobs Report: Hiring Slows, Unemployment Rises," money.cnn.com, June 1, 2012, Tami Luhby
"The Bleak Unemployment Report: Is Europe to Blame?" business.time.com, June 1, 2012, Josh Sanburn
"US Creates 69,000 New Jobs, Unemployment Rate 8.2%," cnbc.com, June 1, 2012, Jeff Cox
"US Job Market All But Stalls in May," economywatch.msnbc.msn.com, June 1, 2012, Patrick Rizzo