Hiring Recovery Sputters

Private employers did little hiring last month, undermining hopes that the economic recovery was gathering pace and helping send U.S. stocks down more than 3% on the day.
The Labor Department said Friday that 431,000 jobs were added in May. But the vast majority were temporary workers hired by the government to conduct the 2010 Census. Private-sector employment rose by only 41,000, the smallest monthly increase since January. Without faster private-sector job growth, the U.S. faces a bumpy recovery restrained by households with little income to spend.


Renewed fears about U.S. growth and the financial turmoil in Europe sent the Dow Jones Industrial Average tumbling 323.31 points, or 3.15%, to 9931.97—the Dow's second slide below 10000 in two weeks. It was the blue chips' lowest close since Feb. 8 and the third-biggest point and percentage decline of 2010.
The economy's prospects are made all the more challenging by the unrelenting concerns over Europe's sovereign-debt crisis. European stocks fell sharply on concerns about Hungary's solvency, and the euro dropped to $1.1966, its lowest late-day New York level since 2006.

The U.S. jobless rate dipped in May, to 9.7% from 9.9% the month before. But that was largely due to discouraged workers giving up the job search, as well as the Census hires. Those positions added 411,000 workers.

The dim jobs report undercut President Barack Obama's attempts to call attention to the recovery. In a speech in Wednesday, Mr. Obama said, "We've now added jobs for five of the last six months, and we expect to see strong job growth in Friday's report." Although the president Friday described the new data as "a sign that our economy is getting stronger by the day," few analysts saw it that way.

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