[Marxism] Green shoots turn brown

Louis Proyect lnp3 at panix.com
Fri Jun 1 07:37:57 MDT 2012


Unemployment up in May as job growth falls off
By Ylan Q. Mui, Friday, June 1, 9:02 AM

The unemployment rate inched up to 8.2 percent in May as job 
growth fell sharply, according to government data released Friday 
morning, stoking fears that the recovery has stalled amid 
uncertainty over domestic policy and the fiscal crisis in Europe.

The Labor Department reported that the businesses added a meager 
69,000 jobs last month — less than half the number economists had 
expected. It also revised its estimate of job growth in April down 
from 115,000 to just 77,000.

Economists had hoped that lackluster job numbers in recent months 
were merely the consequence of a statistical fluke. But Friday 
morning’s data suggested something more like deja vu: The numbers 
are the weakest since last May, when the economy fell into a slump 
that lasted through the summer.

Signs of the slowdown appeared earlier this week when a key survey 
of businesses showed they hired fewer people than anticipated. The 
ADP National Employment Report showed a gain of 133,000 jobs last 
month — less than economists had expected. Most of the increase 
was driven by the service industry, while manufacturing and 
construction employment declined.

“The sharpness of the deceleration seems consistent with other 
incoming data suggesting the economy, weighed down by heightened 
uncertainty over the European financial crisis and by growing 
concerns about domestic fiscal policy, slowed early in the year,” 
said Joel Prakken, chairman of Macroeconomic Advisers, which 
helped compile the report.

The Labor Department’s weekly tally of people filing for 
unemployment benefits for the first time also dampened optimism. 
The number rose by 10,000 last week, to 383,000, while the 
previous week’s results were revised slightly upward.

Adding to the dour economic news were Commerce Department data 
showing that economic growth was slower than initially estimated. 
The agency revised first-quarter GDP growth down to a 1.9 percent 
annual rate, compared with the previously announced 2.2 percent rate.

“The domestic economy has repeatedly looked as if it was finally 
gaining traction, only to be beaten back again by the unique 
problems that keep surfacing during the recovery process,” said 
Steven Ricchiuto, chief economist at Mizuho Securities.

Economists also warned that rising tensions in the Middle East, 
particularly over Iran’s nuclear program, could push oil prices 
back up. That would dial back the gains in consumer spending as 
shoppers enjoyed some relief at the pump.

The uncertainty over the global economy has constrained domestic 
growth, said Bernard Baumohl, chief global economist for the 
Economic Outlook Group.

“These are periods that are very difficult to predict,” he said. 
“There is such a lack of clarity where the economy is heading that 
companies are apprehensive about significantly ramping up hiring.”

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