Poor May jobs data sets challenge for White House
The economy added a paltry 54,000 new jobs last month, one-quarter of the February-April pace, while the unemployment rate edged up to 9.1 percent, figures from the Labor Department showed.
While the White House and economists cautioned that the poor data was
likely a monthly blip, it fueled allegations that Obama's economic policies are failing, 18 months ahead of the next presidential election.
With employment figures for the previous two months revised downward, the report confirmed the sharp economic slowdown since the beginning of 2011, despite government efforts to power up a job-creating recovery.
The private sector, expected to drive the economy as state and local governments slash spending, added a measly 83,000 positions, one-third of the rate of the previous three months.
White House economic adviser Austan Goolsbee admitted the numbers were bad, but said "bumps on the road to recovery," were to be expected.
"While the private sector has added more than 2.1 million jobs over the past 15 months, the unemployment rate is unacceptably high and faster growth is needed to replace the jobs lost in the downturn," Goolsbee admitted.
An estimated nine million jobs were lost during the crisis.
But, Goolsbee said: "As the administration always stresses, it is important not to read too much into any one monthly report."
Republican leader Eric Cantor lept on the news as evidence of misguided White House policies.
"It is astounding that despite the warning signs and economic indicators, President Obama and congressional Democrats still have failed to offer any concrete plan to create jobs, reduce our debt, or grow our economy," he said in a rapidly released statement.
And Republican Mitt Romney, who jumped into the 2012 presidential race Thursday by challenging Obama's economic record, tweeted that "today's unemployment numbers show that we are going backwards, and that is the wrong direction for America."
Economists blamed the disappointing figures in part on the impact of Japan's March 11 earthquake-typhoon disaster on US manufacturers -- particularly car makers -- as well as a jump in oil prices.
"Overall, this is horrible," said Ian Shepherdson, US economist for High Frequency economics.
"But we think it is largely a reaction -- an overreaction we would say -- to the rise in oil prices, and a very real hit to autos and tech from the Japan earthquake."
Still, an average of 157,000 jobs were created each month in the first five months of 2011. That is far less than the 200,000 economists say is needed to reduce unemployment.
At 9.1 percent, the unemployment rate is lower than the 9.6 percent level of a year earlier, but virtually unchanged since the beginning of 2011.
Nearly 14 million people are still unemployed more than a year after the country's deep recession ended; 6.2 million people have been jobless for more than six months.
Even if private sector hiring bounces back, spending cuts and layoffs at the federal, state and local levels are likely to eat into those gains.
The White House and Republicans are currently locked in a contentious debate over measures that would slash public spending further.
There were few silver linings in Friday's data. Hourly wages rose a meager 0.3 percent, but were still being eaten away by inflation running at an annual 3.1 percent.
The mining sector added 7,000 new jobs -- driven by jumps in oil and mineral prices -- but the larger manufacturing sector, which had expanded solidly in the first part of the year, lost 5,000.
Meanwhile, the public sector at all levels cut 29,000 jobs.
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