U.S. economy added 69K jobs in May, fewest in a year
BY FRANCINE KNOWLES Business Reporteremail@example.com June 1, 2012 8:12AM
Cheryl Watson talks about finding a job at theTarget job fair for the new State Street Target. Friday, June 1, 2012. | Brian Jackson~Chicago Sun-Times.
Updated: July 6, 2012 10:35AM
A disappointing jobs report showing the economy added only 69,000 jobs in May, the fewest in a year, was yet another unwelcome sign the economic recovery is losing steam.
To make matters worse, the Labor Department report released Friday also revealed the economy created 49,000 fewer jobs in the previous two months than first thought. Meanwhile, the unemployment rate ticked up to 8.2 percent in May from 8.1 percent in April, the first increase in 11 months.
The news sent the stock market into a tailspin.
“It’s a lousy report almost anyway you cut it,” said Chicago-based Mesirow Financial Chief Economist Diane Swonk. “The economy is weakening.”
The Dow closed down 275 points at 12,118, its biggest decline since November, following the news. Six stocks fell for every one that rose on the New York Stock Exchange.
The weak jobs numbers aren’t surprising to job seekers like Cheryl Watson and Eloise Harnett. South Side Chicago resident Watson was laid off two and a half years ago from her job as an insurance analyst and has been unable to find work.
“It’s rough,” Watson said. “It’s definitely a struggle. I should know; I have put in so many applications at so many different places.”
“Awful,” is how Dolton resident Harnett describes the job market. She has been out of work since being laid off from her job as a support service worker with the state of Illinois more than four years ago.
Watson and Harnett were among roughly 700 job candidates who participated in prescheduled interviews at a Target job fair in downtown Chicago Friday. They were hoping to land one of 300 jobs to be filled at the new CityTarget store opening on nearby State Street in July.
“We’ve had thousands of applications,” said store Team Leader Michael Quinn.
The May jobs report revealed construction companies cut 28,000 jobs, the steepest drop in two years. Accounting and bookkeeping services companies cut 14,000 workers, and the government sector shed 13,000.
Some industries did add workers. Transportation and warehousing added 35,600 jobs. The healthcare and social assistance sector added 34,000. Manufacturers added 12,000, and that was an improvement over the 9,000 added in April. But it was far below the 42,000 added in March.
The report showed the number of long-term unemployed rose to 5.4 million from 5.1 million in April. But that was down from 6.2 million in May 2011.
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.
Republican Presidential Challenger Mitt Romney, who has made the economy the central theme of his campaign, seized on the report.
“Today’s weak jobs report is devastating news for American workers and American families,” Romney said. “It is now clear to everyone that President Obama’s policies have failed to achieve their goals and that the Obama economy is crushing America’s middle class.”
Obama said the report shows that the economy is not creating jobs “as fast as we want,” but vowed that the economy will improve.
“Unacceptable,” is how AFL-CIO President Richard Trumka labeled the jobs numbers. But he contended Republicans are blocking President Obama’s efforts to maintain momentum for growth, including the American Jobs Act and routine highway infrastructure investments. “Moreover, Republicans are also looking to cut back on policies that provide relief” for millions of families, he said in a statement.
Businesses have put the brakes on hiring in part because of concerns about Europe’s debt problems and how that will affect the global economy, economists said.
“Clearly businesses are spooked,” said Morningstar Inc. analyst Robert Johnson.
They have reason to be, noted Swonk.
“Europe matters,” she said. “It matters not only because we are exposed to Europe, which is obvious in our financial markets, but also because China’s largest client is Europe, and we sell into China. When China slows, so do we. We’re all interlinked.”