Employment Picture Getting Bleaker

By Toni Vranjes

June 1, 2012

The latest jobs report brought a whole lot of disappointing news.

The economy added a weak 69,000 jobs last month — way below economists’ expectations of 155,000. In May, the unemployment rate increased slightly from 8.1 percent to 8.2 percent, reflecting an increase in the labor force. There was a large jump in the number of long-term unemployed, and the nation’s “underemployment rate” also rose.

Even previous months are looking worse. For both March and April, employment growth was revised downward. The number of new jobs created in March was 143,000, instead of 154,000. Job growth for April was revised from 115,000 to 77,000.

In May, employment grew in several industries, including transportation and warehousing, health care, wholesale trade, and manufacturing. Employment fell in construction and government.

In a troubling sign, the number of long-term unemployed jumped to 5.4 million, from 5.1 million. This category refers to people who have been jobless for 27 weeks or longer.

Meanwhile, the underemployment rate increased from 14.5 percent to 14.8 percent. This category includes discouraged people who have stopped looking for work, as well as part-time workers who would rather be in full-time jobs.

Why has job growth become so weak? Economists have many theories.

Meanwhile, the Obama Administration is focusing on long-term hiring trends in the private sector.

“Today we learned that the economy has added private sector jobs for 27 straight months, for a total of 4.3 million payroll jobs over that period,” wrote Alan Krueger, President Obama’s chief economist, in a blog post.

He added: “The economy is growing but it is not growing fast enough.”

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