May jobs report sees slowdown in new jobs, increase in unemployment rate
posted at 10:46 am on June 1, 2012 by Howard Portnoy
The Labor Department’s Bureau of Statistics has released its jobs report for May, and the news is grim. The economy added an anemic 69,000 jobs, which analysts fear is an indicator that the economy is stalling. Perhaps even more sobering is that the unemployment rate rose to 8.2%, the first time it has moved upward in 11 months.
If there is a hint of a silver lining in these dark clouds it is that the labor participation rate is up four tenths of a percent, from 63.8% to 64.2%. But that isn’t enough to offset the pessimism on the part of analysts like Todd Schoenberger, managing principal The BlackBay Group in New York. Schoenberger told CNBC, “It’s painfully obvious the economic recovery in the U.S. isn’t just slowing down, it’s pulling up the emergency brake. And, lack of job creation isn’t the only critical concern. Wages/Income is sharply lower.”
“For those lucky enough to have a job,” Schoenberger further cautioned, “their spending power is sliding when accounting for inflation. The markets will respond negatively to this report.”
More gloom and doom informed the reaction of Doug Roberts, managing principal for Channel Capital Research, who was also interviewed by CNBC. “Government is the lender and spender of last resort in this economy,” he said. “There is no priming the pump, and as government stimulus wears off the economy starts to slow down again.”
The White House is taking a more positive (one might say “rose-colored”) approach to the report. As Jake Tapper told George Stephanopoulos on ABC earlier Friday morning, the Obama administration insists despite all the negativity in the report that the figures still represents “net positive job growth, and you can’t look at one individual month, you have to look at several months. You have to look at the overall trend, and the overall trend is still positive.” Tapper went on to quote a White House source as observing that there are several “wet blankets” on the economy, including high energy prices and “that disaster in Japan.”
The only problem with the administration’s optimism is that the typical voter is more concerned with whether there is bread on his table than why. When all is said and done, the argument that “it’s not my fault” plays poorly.
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