Word from the government Friday that U.S. employers slowed their hiring in May raised new fears that the economic recovery is faltering and that consumers, reacting to the bad news, will curtail their spending in coming months.
The labor department said U.S. employers created only 69,000 jobs last month, the fewest in a year and less than half the 158,000 economists had forecast. The unemployment rate ticked up from 8.1 percent in April to 8.2 percent last month. The department said there were 12.7 million active job seekers, the first increase in 11 months, apparently as more people tried to enter the workforce. That number does not include millions of other people who have given up looking for work.
Coming atop worries over Europe's debt crisis and China's slowing economy, the new job numbers sent stock prices tumbling and, by the end of the trading day, the Dow Jones industrial average had lost 275 points, its biggest decline since November. At 12,118, the Dow is now down 0.8 percent this year.
The labor department also said the economy created far fewer jobs in the previous two months than first thought -- 11,000 fewer in March and 38,000 fewer in April.
The dismal jobs data put President Barack Obama on the defensive five months before the election. Republican challenger Mitt Romney charged Friday that Obama's policies "have failed to achieve their goals," and are "crushing America's middle class." Obama, in Minnesota, said the economy is not creating jobs "as fast as we want" but vowed that it would improve.
The jobs picture wasn't universally bad. While construction firms cut 28,000 jobs, manufacturers added 12,000, transportation and warehousing companies created nearly 36,000 and the education and health care fields added 46,000.
Overall job growth has been slowing on Long Island, as well. In April, the Island had just 4,500 more jobs than a year earlier, according to the state Department of Labor. That contrasted sharply with March, when the economy had 19,900 more jobs than a year earlier.
And the Island's unemployment rate jumped to 7.1 percent in April from 6.6 percent the year before. The department uses year-to-year comparisons rather than month over month because, unlike the federal data, the local statistics aren't seasonally adjusted.
"Today's [national] job numbers do concern me because they point to a general slowdown in the economy," said economist Pearl Kamer of the Long Island Association, a business group. "We expected the recovery to proceed in fits and starts and it has."
Kamer noted that U.S. retail sales increased by a scant one-tenth of a percent between March and April and that households have been borrowing more just to sustain their current spending pace.
Bad economic news can have a negative psychological impact on consumer spending, which drives 70 percent of the economy, Kamer said. "Slow job growth engenders fear that even people who have jobs may lose them," she said.
Indeed, major carmakers Friday reported May sales that, while above those a year earlier, were below expectations, at a seasonally adjusted annualized rate that was below 14 million for the first time this year.
At least falling gasoline prices are leaving drivers with more pocket money. Oil futures fell further Friday in reaction to the jobs numbers, with the U.S. benchmark grade settling down $3.30 at $83.23 a barrel on the New York Mercantile Exchange. With AP, Bloomberg and