The U.S. economy suddenly looks a lot weaker. U.S. employers created only 69,000 jobs in May, the fewest in a year, and the unemployment rate ticked up.
The dismal jobs data will fan fears that the economy is sputtering. It also puts President Barack Obama on the defensive five months before his re-election bid. And it could lead the Federal Reserve to take further steps to help the economy.
The Labor Department also said Friday that the economy created far fewer jobs in the previous two months than first thought. It revised those figures down to show 49,000 fewer jobs created. The unemployment rate rose to 8.2 percent from 8.1 percent in April, the first increase in 11 months.
Job creation is the fuel for the nation's economic growth. When more people have jobs, more consumers have money to spend _ and consumer spending drives about 70 of the economy.
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Here's what The Associated Press' reporters are finding:
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SEEKING SOLUTIONS
What can be done to energize U.S. hiring?
Sung Won Sohn, an economics professor at California State University, said Congress and the Obama administration must work immediately to address the "fiscal cliff" looming at year's end. That's when the economy will be hit with higher taxes and across-the-board government spending unless Democrats and Republicans forge some compromise.
Uncertainty over what will be done about the fiscal cliff will likely hang over the U.S. economy for months.
"Businesses have pulled in their horns, given the growing amount of uncertainty," Sohn said.
He said Federal Reserve Chairman Ben Bernanke could also start discussing another round of Fed bond buying to try to further lower long-term interest rates.
Sohn noted that more bond buying remains unlikely given how low rates are already. Still, he said, "just the fact that Bernanke is talking about more Fed bond buying would be important. What we need is a psychological lift."
