After several months of strong job growth, hiring in the United States slowed sharply in May, suggesting the economy is running out of steam once again.
The Labor Department reported on Friday that the nation added 54,000 nonfarm payroll jobs last month, after an increase of about 220,000 jobs in each of the three previous months. May’s job gain was about a third of what economists had been forecasting.
The unemployment rate ticked up to 9.1 percent from 9.0 percent in April.
“The economy clearly just hit a brick wall,” said Paul Ashworth, chief United States economist at Capital Economics. “It’s almost as if it came to a complete standstill.”
Friday’s dismal job numbers capped a week of disappointing economic news on manufacturing, housing and retail activity. Pressure is now mounting on the Obama administration and Congress to delay deficit-reduction measures, which economists think will put a further drag on the fragile recovery. Already liberal groups have renewed their calls for more aid to the states and more aggressive action from the Federal Reserve — even as a warning from Moody’s about the country’s sterling credit rating has galvanized Republican support for spending cuts.
In some ways the moment is reminiscent of last spring, when the economy also braked abruptly just as it seemed to be gaining momentum. At the time, the slowdown was attributed to worries over the European debt crisis, just as Friday’s numbers have been attributed in part to temporary stresses from higher energy prices and natural disasters. Last year’s downshift was ultimately followed by additional federal spending and another round of asset purchases by the Federal Reserve.
The latest jobs numbers sent markets tumbling, with oil prices and bond yields declining. The Dow Jones industrial average was down 133 points, or 1.1 percent, within minutes after the opening bell, though stocks later recovered some of those losses.
The biggest employment gains were in professional and business services and in health care services, which grew steadily even during the recession.
http://www.nytimes.com/2011/06/04/bu...s.html?_r=1&hp
Note: Update Record, Published: June 3, 2011