Stumbling US job growth may push Fed to act
Source: Agencies |
June 2, 2012, Saturday
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Print Edition
Print Edition
UNITED States employers created only 69,000 jobs in May, the fewest in a year, and the unemployment rate ticked up, boding ill for US President Barack Obama's re-election chances.
Republicans seeking the White House have accused Obama of failing to steer the economy out of a deep recession, setting up the health of the nation's economy as a pivotal issue in the 2012 election.
The dismal jobs data will fan fears that the economy is sputtering. And it could lead the Federal Reserve to take further steps to help the economy.
The Labor Department also said yesterday 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 percent from 8.1 percent in April, the first increase in 11 months.
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 percent, and past incumbents have lost when the unemployment rate was on the rise.
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.
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 percent 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.
Businesses are facing a growing threat from Europe's financial crisis.
Republicans seeking the White House have accused Obama of failing to steer the economy out of a deep recession, setting up the health of the nation's economy as a pivotal issue in the 2012 election.
The dismal jobs data will fan fears that the economy is sputtering. And it could lead the Federal Reserve to take further steps to help the economy.
The Labor Department also said yesterday 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 percent from 8.1 percent in April, the first increase in 11 months.
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 percent, and past incumbents have lost when the unemployment rate was on the rise.
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.
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 percent 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.
Businesses are facing a growing threat from Europe's financial crisis.
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