IBJNews

U.S. unemployment rises to 9.1 percent on slow job growth

Associated Press
June 3, 2011
Keywords
Back to TopCommentsE-mailPrintBookmark and Share

U.S. employers in May added the fewest jobs in eight months, and the unemployment rate inched up to 9.1 percent. The weakening job market raised concerns about an economy hampered by gas prices and the Japanese nuclear disaster.

The key question is whether the meager 54,000 jobs added last month mark a temporary setback or are evidence of a more chronic problem. That total is far lower than the previous three months' average of 220,000 new jobs per month.

Private companies hired only 83,000 new workers in May — the fewest in nearly a year.

Stocks on Wall Street fell for the third straight day. The Dow Jones industrial average was down 76 points in late-morning trading. Broader indexes also dropped.

Among the deepest job cuts were in local governments, which cut 28,000 jobs last month, the most since November. Nearly 18,000 of those jobs were in education. Cities and counties have cut jobs for 22 straight months and have shed 446,000 positions since September 2008.

The anemic pace of job creation poses a challenge to President Barack Obama's re-election prospects next year. And it followed a string of sluggish economic data in the past month that suggest the economy is growing more slowly.

The manufacturing sector, a key driver of the recovery, grew at its slowest pace in 20 months in May. Home prices in big metro areas have reached their lowest level since 2002.

Higher gas prices have left less money for consumers to spend on other purchases. And average wages aren't even keeping up with inflation. As a result, consumer spending, which fuels about 70 percent of the economy, is growing sluggishly.

Economists have said that most of the factors slowing the economy are temporary. But some are now concerned that their impact is greater than they first envisioned.

"Economic activity has clearly hit a soft patch," said Steven Wood, chief economist for Insight Economics. "The open question is whether this is temporary and will quickly reverse itself over the next couple of months or whether this is an adjustment to a slower permanent growth rate."

Nariman Behravesh, chief economist at HIS, called it a "pretty bad report. It's tempting to say it's an outlier, but I'm a little worried."

More people entered the work force in May. But most of the new entrants couldn't find work. That pushed the unemployment rate up from 9 percent in April. The number of unemployed rose to 13.9 million.

And the government revised the previous months' job totals to show 39,000 fewer jobs were created in March and April than first estimated.

The weakness in hiring was widespread. Manufacturers cut 5,000 jobs, the first job loss in that sector in seven months. They included a drop of 3,400 jobs in the auto sector.

Car makers are cutting back on production because they are having a difficult time buying parts. Many auto parts, including some key electronic components, are made in Japan, and the March 11 earthquake and ensuing nuclear crisis in that country has disrupted supply chains.

Sectors of the economy most dependent on consumer spending suffered some of the steepest job losses in May. Retailers cut 8,500 positions, after adding 64,000 in April. And leisure and hospitality, which includes restaurants and hotels, cut 6,000 jobs. That came after they added an average of 43,000 in the previous three months.

There were some bright spots in May. Professional and business services added 44,000 positions, most of them in accounting, information technology services, and management.

Still, the economy must generate at least 100,000 jobs each month just to keep up with population growth and prevent the unemployment rate from rising. And economists say the gains need to be at least double that total to drive down the rate.

About 8.5 million Americans worked part time, even though they would have preferred full-time jobs. An additional 2.2 million have stopped looking in the past year.

When the unemployed are combined with part-time workers who would rather be working full time and people who have given up looking for jobs, roughly 25 million Americans are "underemployed." That's equal to 15.8 percent of the work force.

ADVERTISEMENT

  • they are the cause of this
    they are the cause of this with their greed they have brought down our way of life making it harder on us and they wonder why good how dumb can they be I hope the market cashes again
    because we can't afford it.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Angela IS the best RD

  2. We are a nation of speed. All of our younger lives are filled with deadlines, quotas and bottom lines. We start to ease out of the pressured rat-race when we finally see "retirement." The most enjoyable travel on the planet is passenger rail service. Indy to Chicago does not beat Megabus or Southwest Airlines in speed. Passenger rail however has the best seating, mammoth legroon, seat backs that recline to more than 45 degrees and employers that really want you to return as a customer. Indiana municipalities need to maintain subsidies to support this transportation mode. Losing it is loss for all of us.

  3. Good day! I just want to testify how i got my loan from Mr. Eric Lefkofsky after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan. Until a friend of mine introduce me to this popular Mr. Eric Lefkofsky who promised to help me and indeed he did as he promised without any form of delay. I never thought there are still reliable loan lenders until i met Mr. Eric lefkofsky who indeed helped me with the loan and changed my belief. I promised to share this testimony after I got my loan. I don't know if you are in any way in need of a genuine and urgent loan,free feel to contact Mr. Eric Lefkofsky via their email{grouponfunding@hotmail.com}

  4. Its a THUG issue. Bleecker Street and NYX are thug bars. They attract thugs of all races. Places that attract thugs need to be kicked out of Broad Ripple. Ain't nobody got time for that!

  5. Hello everyone, My name is Marian Gareth, I am from the Texas, United State, am here to testify of how i got my loan from Mr Andre Frank {frankloancompany@yahoo.com} after i applied Two times from various loan lenders who claimed to be lenders right in this forum,i thought their lending where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr Andre Frank the C.E.O of Andre Frank Loan Company who promised to help me with a loan of my desire and he really did as he promised without any form of delay, I never thought there are still reliable loan lenders until i met Mr Andre Frank, who really help me with my loan and changed my lief for better. I don't know if you are in need of an urgent loan, free feel to contact Mr Andre Frank on his email{ Frankloancompany@yahoo.com} for help

ADVERTISEMENT