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Lackluster U.S. job report stokes economic slowdown fears

06-04-2011 13:02 BJT

by Xinhua writer Jiang Xufeng

WASHINGTON, June 3 (Xinhua) -- Latest official statistics showed that the U.S. unemployment rate inched up for the second consecutive month in May, sparking new fear that the nascent economic recovery has hit another soft patch.

The non-farm sector added merely 54,000 new jobs in May, far short of the 200,000 monthly level that economists believe is robust enough to slash the unemployment rate over the long run, according to a lackluster job report released Friday by the Labor Department.

The unemployment rate rose to 9.1 percent in May from the 9 percent in the previous month, reversing a four-month decline of the widely scrutinized figure.

A trader works on the floor of the New York Stock Exchange in New York, the United States,
June 1, 2011. U.S. stocks plunged on Wednesday after four straight gains, as the latest
data on jobs and manufacturing markets provided fresh evidence for a weaker economic
recovery. (Xinhua/Shen Hong)

Addressing workers Friday at a Chrysler plant in Ohio, U.S. President Barack Obama said the economy will pass through some "rough terrain."

Economists hold that the job creation pace is anemic against the backdrop of the pool of 13.9 million unemployed Americans, about double the level prior to the recent international financial crisis and economic recession.

The job creation pace in May was the slowest in eight months, as the nation's private employers added 83,000 jobs and government employment declined by 29,000 amid spending cuts.

Meanwhile, retail trade slashed 8,500 jobs and manufacturing sector employment trended down by 5,000.

Construction employment was unchanged in May, as home prices have hit new bottoms across the nation, imperilling the fragile economic recovery with millions of Americans grappling with the falling values of their largest household investments.

Falling home values would damage banks' balance sheets, make families feel poorer and dampen household consumption, while many households are still paying back debt since the start of the recovery, said Sebastian Mallaby, a senior fellow at the Council on Foreign Relations.

Even economic officials from the Obama administration admitted that the unemployment rate is "unacceptably high." Austan Goolsbee, chairman of the Council of Economic Advisers, said that although the private sector has added more than 2.1 million jobs over the past 15 months, faster growth is needed to replace the jobs lost in the downturn.

The world's largest economy lost more than 8.4 million jobs in the recent recession, the worst in decades, while the Obama administration's target of reducing the unemployment rate to less than 8 percent has not been achieved.

Although the nation's economy is on the right track, more efforts should be made to create jobs and stimulate consumers' confidence, U.S. Labor Secretary Hilda Solis said Friday in an interview with U.S. broadcaster CNBC.

As another sign of a still tough job market, breakdown data also showed that the number of the long-term unemployed who have been jobless for at least 27 weeks rose by 361,000 to 6.2 million in May, accounting for 45.1 percent of the total unemployed, not far from its record high of 45.6 percent one year ago.

Experts believed that a set of factors contributed to the agonizingly slow improvement of the job market and the broader economy, while new stimulative measures are needed to shore up the economy.

Some economists hold that a sluggish job market go in tandem with an overall sputtering economic recovery.

The U.S. economy has expanded by a total of 4.9 percent since the recent recession officially ended in June 2009, which is comparatively small.

With many U.S. consumers feeling the pains at the fuel pumps, Mallaby argued that energy price spikes have driven families to cut down on discretionary spending, causing the leisure and hospitality sector to cut jobs after four months of solid expansion.

Solis stressed that the nation needs to foster investment from the smaller firms and stimulate economic growth, cautioning that the improvement path of the U.S. job market will be rocky.

"The U.S. workforce needs the pace of job growth to accelerate dramatically in order to re-establish full employment within any reasonable time frame, but instead, the recovery is on pause," said Heidi Shierholz, an economist with the Washington-based Economic Policy Institute.

"Without additional stimulus, the unemployment rate may rise further," Shierholz added.

Editor:Du Xiaodan |Source: Xinhua

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