Higher energy prices have weighed on consumer spending and also cut into business profits. Concerns about the nation's budget deficits and the looming deadline to raise the debt ceiling have further eroded confidence.
U.S. Labor Secretary Hilda Solis said the budget uncertainties -- and perceptions that Washington isn't doing enough to help the economy -- probably took some steam out of private job growth, which has totaled 2.1 million in the last 15 months.
"I am concerned about it," she said of the May jobs report in an interview, "but I don't think it's going to determine where we go."
Wall Street was braced for a poor jobs report, but the payroll numbers came in even smaller than the lowered expectations from analysts, which averaged about 160,000. Stock prices have broadly retreated in recent days, and were down moderately on Friday. Further declines in stocks could sap consumer spending even more.
"Looking ahead we see some risk that total payrolls will continue to disappoint during the summer as state and local government layoffs of teachers continue to feed into the data as the school year ends," economists at UBS Investment Research said in a research note.
Friday's Labor Department report showed that for all employees on private-sector payrolls last month, numbering about 131 million, hourly earnings averaged $22.98. That was up 41 cents from a year ago -- or 1.8%, which is below the current pace of inflation.
The officially unemployed, meanwhile, held steady at about 13.9 million last month. But the share of those who have been without work for six months or more, the so-called long-term unemployed, jumped to 45.1%, near a record high.
In addition, the ranks of part-time workers who said they couldn't find full-time jobs stood at 8.5 million last month. And there were 822,000 discouraged workers who have stopped looking for jobs because they saw little hope of getting hired. Taken together, the level of unemployed and underemployed was 15.8% in May, compared with 15.9% in the prior month.
Most analysts still expect the economy to pick up from the sluggish pace of growth in the first half of this year, but many have recently marked down their expectations for economic and job growth for the remainder of the year. Forecasters at Moody's Analytics, a leading research firm, now see employers adding fewer than 200,000 jobs a month for the rest of this year, a pace that would barely make a dent in the high unemployment rate.
In recent economic recoveries, small businesses accounted for an outsized share of the job growth. But small firms haven't done nearly as well as large companies, many of which have reported outstanding profits. The outlook for hiring by small employers dipped in the latest monthly survey conducted by the National Federation of Independent Business. Its May survey found a drop in the share of firms planning to add workers in the next three months, while those planning to reduce staff increased slightly.
"With one in four owners reporting 'weak sales' as their No. 1 business problem, there is little need to add employees, especially with the uncertainty about future labor costs arising from new regulation and legislation," said William Dunkelberg, the NFIB's chief economist. "And, if Congress doesn't deal effectively with the trillion-dollar deficits, that is worrisome as well."
U.S. Labor Secretary Hilda Solis said the budget uncertainties -- and perceptions that Washington isn't doing enough to help the economy -- probably took some steam out of private job growth, which has totaled 2.1 million in the last 15 months.
"I am concerned about it," she said of the May jobs report in an interview, "but I don't think it's going to determine where we go."
Wall Street was braced for a poor jobs report, but the payroll numbers came in even smaller than the lowered expectations from analysts, which averaged about 160,000. Stock prices have broadly retreated in recent days, and were down moderately on Friday. Further declines in stocks could sap consumer spending even more.
"Looking ahead we see some risk that total payrolls will continue to disappoint during the summer as state and local government layoffs of teachers continue to feed into the data as the school year ends," economists at UBS Investment Research said in a research note.
Friday's Labor Department report showed that for all employees on private-sector payrolls last month, numbering about 131 million, hourly earnings averaged $22.98. That was up 41 cents from a year ago -- or 1.8%, which is below the current pace of inflation.
The officially unemployed, meanwhile, held steady at about 13.9 million last month. But the share of those who have been without work for six months or more, the so-called long-term unemployed, jumped to 45.1%, near a record high.
In addition, the ranks of part-time workers who said they couldn't find full-time jobs stood at 8.5 million last month. And there were 822,000 discouraged workers who have stopped looking for jobs because they saw little hope of getting hired. Taken together, the level of unemployed and underemployed was 15.8% in May, compared with 15.9% in the prior month.
Most analysts still expect the economy to pick up from the sluggish pace of growth in the first half of this year, but many have recently marked down their expectations for economic and job growth for the remainder of the year. Forecasters at Moody's Analytics, a leading research firm, now see employers adding fewer than 200,000 jobs a month for the rest of this year, a pace that would barely make a dent in the high unemployment rate.
In recent economic recoveries, small businesses accounted for an outsized share of the job growth. But small firms haven't done nearly as well as large companies, many of which have reported outstanding profits. The outlook for hiring by small employers dipped in the latest monthly survey conducted by the National Federation of Independent Business. Its May survey found a drop in the share of firms planning to add workers in the next three months, while those planning to reduce staff increased slightly.
"With one in four owners reporting 'weak sales' as their No. 1 business problem, there is little need to add employees, especially with the uncertainty about future labor costs arising from new regulation and legislation," said William Dunkelberg, the NFIB's chief economist. "And, if Congress doesn't deal effectively with the trillion-dollar deficits, that is worrisome as well."
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