U.S. job growth braked sharply for a third straight month in May and the unemployment rate rose for the first time in nearly a year, raising chances of further monetary stimulus from the Federal Reserve to support the sputtering recovery.
Employers added a paltry 69,000 jobs to their payrolls last month, the least since May of last year, and 49,000 fewer jobs were created in the previous two months than had been thought, the Labor Department said on Friday.
The report is troubling for President Barack Obama, whose prospects of winning re-election in November could hinge on the economy’s health. Republican opponent Mitt Romney called the report “a harsh indictment” of Obama’s policies.
The jobless rate rose to 8.2 percent in May from 8.1 percent in April, although the increase reflected more people entering the labor force to look for work, a possible sign of growing confidence.
The data offered the clearest evidence yet that the deepening debt crisis in Europe and a slowdown in China were starting to dampen an already lackluster U.S. recovery. Concerns over the course of U.S. fiscal policy may also be weighing.
“The U.S. is not an island. What happens abroad matters here,” said Diane Swonk, chief economist at Mesirow Financial in Chicago. “It is difficult for anyone to commit to hire when growth remains subdued, and our fiscal problems both at home and abroad appear to be compounding.”
Given that fans of President Obama were quick to give him credit when previous jobs reports showed better employment gains, I presume that they will be just as quick to blame him for today’s exceedingly disappointing numbers. Similarly, I trust that the president will be just as willing to bear responsibility for today’s bad numbers as he was to claim that past good ones were his doing.
In related news, the Washington Post is planning a five-part special on how Mitt Romney is a poor tipper.