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Ugh: Hiring Down, Unemployment Up

Today's job report was supposed to be discouraging. It wasn't supposed to be this discouraging.

Via Catherine Rampbell at the New York Times:

After several months of strong job growth, hiring slowed sharply in May, raising concerns once again about the underlying strength of the economic recovery.
The Labor Department reported on Friday that the United States added 54,000 nonfarm payroll jobs last month, following an increase of 232,000 jobs in April. May’s job gain was about a third of what economists had been forecasting.
The unemployment rate ticked up to 9.1 percent from 9.0 percent in April.

The details tell a somewhat familiar story. State and local governments, facing budget crises, laid off 29,000 workers last month. That's the seventh month in a row government workforces have shrunk, offsetting new hires by businesses. But even the private sector report looks shaky this month. The manufacturing sector, which has been growing robustly, shed jobs for the first time since October. 

To quote Jared Bernstein, the recently departed White House economist now at the Center on Budget and Policy Priorites: "YUK."

Temporary factors, including supply disruptions from the Japan earthquake and tsunami, were a major factor in the slowdown. And it's just a one-month snapshot, never a good basis for broad conclusions. But, as the Times' David Leonhardt notes, this is consistent with five months of weak growth numbers. The economy just isn't creating jobs quickly enough to make up for the huge losses of 2009 and 2010. 

Fortunately, President Obama is clamoring for more stimulus and Congress is ready to enact it, while the Federal Reserve is preparing its own intervention. Er...

Graphic by Steve Benen: Monthly employment changes since beginning of the Great Recession.