The U.S. economy is showing signs of slowing down, adding only 54,000 jobs in May – the smallest increase in eight months. The nation’s unemployment rate inched higher last month to 9.1 percent, raising fears the U.S. recovery already may have peaked.
Hiring in May fell far short of the 150,000 jobs that Wall Street was expecting, sending stock prices sharply lower on Friday.
The big question among investors is whether the anemic job numbers are temporary or evidence of deeper economic problems. Economist Mark Vitner at Wells Fargo takes the more optimistic view.
“What this report reflects is a kind of the peak run-up in gasoline prices, the peak of the disruption in the Japanese supply shortages, so I don’t think this necessarily should be carried forward all the way through the summer, although we probably will have another weak month or two,” he said.
The White House downplayed the lower job numbers as just a bump in the road. On a tour of a Chrysler car plant in Ohio, President Barack Obama said the economy continues to recover from the worst recession in decades. He credited his administration’s decision to bail out the auto industry for saving more than a million jobs.
“What’s most important is that all three automakers are now adding shifts and creating jobs at the strongest rate since the 1990s,” the president said.
The president’s critics pounced on the jobs report as a sign the U.S. economy is on the wrong track.
Republican House Speaker John Boehner said, “You talk to job creators around the country like we have, they’ll tell you that the over taxing, over regulating and overspending that’s going on here in Washington is creating uncertainty and holding them back.”
The weakness in hiring last month was widespread. Manufacturers cut 5,000 jobs, retailers slashed more than 8,000 positions, and the service and hospitality trades reduced payrolls by 6,000.
The White House says the U.S. economy has added more than two million jobs in the past 15 months. But the latest job numbers show nearly 14 million Americans still are looking for work.