[Marxism] Green shoots turn brown
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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