The recovery in the US jobs market hit a wall in May as the economy added a paltry 69,000 jobs and the unemployment rate rose to 8.2%, the first rise in nine months.
The news, combined with fresh fears about the future of the eurozone, sent US stock markets into a tailspin. By early afternoon the Dow Jones had lost over 270 points, all the gains it had made so far in 2012.
May’s figures are the third consecutive set of disappointing numbers but the latest report from the labour department contained more worrying news. The gain was the smallest in a year. At the same time, April’s gain of 115,000 jobs was revised down to an increase of just 77,000.
A broader measure of unemployment, the U6, rose to 14.8% in May from 14.5% in April. The U6 takes into account job seekers as well as those working part-time who want to work full-time jobs.
Republican presidential nominee Mitt Romney attacked the president’s record on jobs. He said the report was “very bad news” and said the president had focussed on his landmark healthcare legislation at the expense of the economy.
“Jobs are jobs one for the presidency,” Romney said in an interview with the CNBC financial news channel. “And unfortunately this president put in place Obamacare.”
But Obama defended his record during a campaign stop at the Honeywell plant in Golden Valley, Minnesota, blaming political infighting for holding back growth in the job market.
“We’ve got responsibilities that are bigger than an election,” said Obama. He said Congress had stalled on his plans to create jobs in “This is a problem we can fix,” he said. “Let’s do it right away.”
Earlier, Alan Krueger, chairman of the Council of Economic Advisers, had moved to dampen the political fallout from the figures. “Problems in the job market were long in the making and will not be solved overnight,” he said in a statement released by the White House.
“The economy lost jobs for 25 straight months beginning in February 2008, and over 8m jobs were lost as a result of the Great Recession. We are still fighting back from the worst economic crisis since the Great Depression.”
He said the US economy faced “serious headwinds, including the crisis in Europe and a spike in gas prices” but it was important not to read too much into one month’s figures.
Read more at the Guardian…