'Lousy' News: Just 69,000 Jobs Added In May; Jobless Rate At 8.2 Percent & Dow Plunges; Now In Negative Territory For The Year 1JUN12

NOT what the country needs right now, and one has to wonder just how much of this is political and not economic. For all his kow-towing to the wall street and bank-financial cabals they have no love for the Pres Obama, and I fear they will manipulate the economy to any extent to destroy his chances of re-election. The real losers are the poor, working and middle classes, we will suffer lower wages, higher prices, increased unemployment, more home foreclosures and decreased retirement accounts. Still, mitt romney has nothing on Pres Obama's record of job creation, see my earlier post Paul Begala:What's Mitt Romney Hiding in His (ECONOMIC) Record as Governor 30APR12 http://bucknacktssordidtawdryblog.blogspot.com/2012/05/paul-begalawhats-mitt-romney-hiding-in.html
From NPR.....

by Mark Memmott

Horrid. Lousy. Awful.
Those are just three of the words economists are using to describe the news that just 69,000 net jobs were added to public and private payrolls last month — and that the nation's jobless rate edged up to 8.2 percent from April's 8.1 percent.
The news has raised fears that the hoped-for strengthening of the economy may not materialize.
We posted on the news and followed with details from the report and reaction to it. It's now 11:22 am. ET, here's our original post and earlier updates:
The nation's unemployment rate rose to 8.2 percent in May from 8.1 percent in April as just 69,000 jobs were added to public and private payrolls, the Bureau of Labor Statistics said this morning.

Related NPR Stories

Obama, Romney Have Sharply Different Takes On Weak Jobs News June 1, 2012

Graphics: Tracking U.S. Monthly Unemployment June 1, 2012

Both numbers are disappointments. Economists had expected BLS would say the jobless rate had stayed at 8.1 percent and that payrolls expanded by at least 150,000 jobs.
We'll be adding to this post as we gather more data from the report and reactions to it, so hit your "refresh" button to be sure you're seeing our latest updates.
Update at 11:20 a.m. ET: "Jobs slowdown adds to global fears," The Wall Street Journal says.
Update at 11:10 a.m. ET. Have Hopes Been Dashed?
Nigel Gault, chief economist at IHS Global Insight, writes that "2012 is beginning to look horribly like 2011 — initial high hopes that the recovery was kicking into high gear, subsequently dashed."
Update at 9:54 a.m. ET. Weak, Lousy, Horrid; Pick Your Word:
Reuters rounds up reactions from some economists here. Among the words they use for the news:
— "Weak."
— "Pretty horrid."
— "Lousy."
— "Awful."
— "Ugly."
Update at 9:45 a.m. ET: White House Says Economy Is Still "Fighting Back" From Crisis:
"We are still fighting back from the worst economic crisis since the Great Depression," the president's top economic adviser, Alan Krueger, writes on the White House blog. "There is much more work that remains to be done to repair the damage caused by the financial crisis and deep recession that began at the end of 2007."
And he makes the case that "it is critical that we continue the president's economic policies that are helping us dig our way out of the deep hole that was caused by the severe recession."
Update at 9:34 a.m. ET: "Stocks Drop On Weak Jobs News."
Update at 9:26 a.m. ET. On The Political Impact; A "Gut-Punch For Team Obama":
"Why is this presidential race close? And why might it get closer?" asks MSNBC's First Read blog. "Look no further than today's jobs report for May, which is a gut-punch for Team Obama."
Update at 9:20 a.m. ET. Romney Calls Report "Devastating News," Blames Obama's "Failed" Policies.
The political repercussions are staring to be felt. Republican presidential candidate Mitt Romney's campaign just sent this statement to reporters:

"Today's weak jobs report is devastating news for American workers and American families. This week has seen a cascade of one bad piece of economic news after another. Slowing GDP growth, plunging consumer confidence, an increase in unemployment claims, and now another dismal jobs report all stand as a harsh indictment of the president's handling of the economy.
"It is now clear to everyone that President Obama's policies have failed to achieve their goals and that the Obama economy is crushing America's middle class. The president's re-election slogan may be 'forward,' but it seems like we've been moving backward. We can do so much better in America. That's why I'm running for president."

Update at 9:11 a.m. ET. "An Awful Recovery":
Our colleague Jacob Goldstein this morning looked at "Three Years Of An Awful Recovery," over at the Planet Money blog.
Update at 9:07 a.m. ET. Income, Consumer Spending Figures Also Weak:
Meanwhile, the Bureau of Economic Analysis says Americans' personal income rose just 0.2 percent in April from March and that consumer spending grew by a modest 0.3 percent. The income gain, the slowest in five months, raises concerns "about the ability of Americans to keep spending in the future," The Associated Press writes.
Update at 9:04 a.m. ET. "Marginally Attached" Workers Also On The Rise.
Another sobering detail from the report:

"In May, 2.4 million persons were marginally attached to the labor force, up from 2.2 million a year earlier. ... These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey."

Update at 9:01 a.m. ET. There Are 5.4 Million "Long-Term Unemployed":
  According to BLS, "the number of long-term unemployed (those jobless for 27 weeks and over) rose from 5.1 to 5.4 million in May. These individuals accounted for 42.8 percent of the unemployed."
Update at 8:58 a.m. ET. What's Going On? "Broad Uncertainty":
Here's how The Wall Street Journal is summing things up:

"Nearly three years after the recession ended, the economy has failed to gain traction amid broad uncertainty related to Europe's debt crisis, the potential for steep U.S. tax increases and spending cuts next year, and signs of slower growth in developing countries."

Update at 8:55 a.m. ET. Stock Futures "Plummeting."
From The Associated Press:

"U.S. stock futures are plummeting after the release of a report on the job market that was far weaker than economists expected. Dow Jones industrial average futures, which were down 100 points before the report came out at 8:30 a.m. ET Friday, dropped an additional 100 points within minutes."

Update at 8:49 a.m. ET. A Vicious Cycle?
Economists sometimes talk about "virtuous" and "vicious" cycles. Basically, once the economy gets on a roll it can continue to expand as confidence, incomes and jobs all rise and build on each other. Conversely, when things aren't going well that can create a downward spiral.
Bloomberg News writes that:

"Bigger job and wage gains are needed to jumpstart a self- sustaining increase in hiring and consumer spending that will boost the expansion. At the same time, a looming recession in the euro area and slower growth in China and Brazil may prompt American companies to reduce headcount until they see more evidence the U.S. economy isn't faltering."

Update at 8:47 a.m. ET. A "Sputtering" Economy?
Here's how The Associated Press sums up the news: "The dismal jobs figures could fan fears that the economy is sputtering."
Update at 8:46 a.m. ET. Sharp Slowing From First Quarter:
According to BLS, in the first quarter the average monthly gain in payrolls was 226,000. But payrolls grew by just 77,000 in April and 69,000 in May.
Update at 8:44 a.m. ET. Number Of "Discouraged Workers" Remains High:
In another sign of the labor market's weakness, BLS says "there were 830,000 discouraged workers in May, about the same as a year earlier."
Update at 8:39 a.m. ET. Sharp Downward Revision Of April's Gain:
BLS initially thought payrolls grew by a net 115,000 jobs in April, but now says just 77,000 positions were added that month.
http://www.npr.org/blogs/thetwo-way/2012/06/01/154131119/unemployment-rate-8-2-percent-in-may-as-just-69-000-jobs-added?sc=nl&cc=brk-20120601-0838

Dow Plunges; Now In Negative Territory For The Year

by Eyder Peralta and Mark Memmott

Stock prices fell on Wall Street today as investors digested the much-weaker-than-expected report on job growth in May.
The damage? The Dow plunged 274 points or 2.2 percent. The Nasdaq fell 80 points or 2.82 percent.
CNN Money reports the Dow had the worst day of 2012, erasing "all its gains for the year."
Update at 4:23 p.m. ET. 'A Little Over Done'?
Our Newscast unit just spoke to James W. Paulsen, chief investment strategist at Wells Capital Management, who said the market may have overdone it a bit, today.
He said investors reacted to weak job reports but if you look at the average job gains throughout the whole year, "we're still doing decently."
"The economy is in better shape than these numbers," said Paulsen.
If you look at retail sales, consumer spending, housing prices and consumer confidence, you get a picture that is not nearly as weak as the latest job numbers — and the revisions — will have you think.
Four or five times this year, Paulsen said, we've seen the market plunge only to rally later.
Paulsen set up a positive vision, where the market pulls back for a little bit setting itself up for a late-summer rally.
Update at 4:50 p.m. ET. Another Opinion:
Beth Ann Bovino, deputy chief economist at S&P, has a less cheery view of the economy.
Essentially she said the markets were already teetering, wondering whether the uncertainty with Greece and the Spanish Banks would affect the U.S. What the job numbers may tell us, Bovino told our Newscast unit, is that maybe those problems have already landed on our shores.
"The worry here now — and unfortunately it's becoming increasingly real — is that the U.S. economy has started to slow," she said.
And, yes economist expected slower job growth after a warm January accelerated hiring, but the slow-down has been more severe than predicted.
The question now is whether this slow-down is just a summer lull or whether it marks the beginning of a more serious downturn.
Our earlier updates continue:
Update at 4:10 p.m. ET: The Dow has closed 274 points down (2.2 percent).
Update at 3:30 p.m. ET: A half hour, before close, the Dow is down 263 points or 2.1 percent.
Update at 3 p.m. ET: With an hour to go before trading ends in New York City, the Dow is down about 275 points (2.2 percent).
Update at 2:30 p.m. ET: The Dow's down about 250 points (2 percent).
Update at 2 p.m. ET: Down further: The Dow's off about 265 points (2.2 percent).
Update at 1:30 p.m. ET: The Dow's down about 235 points (1.9 percent).
Update at 1 p.m. ET: The Dow's down about 220 points (1.8 percent).
Update at Noon ET: The Dow's down about 210 points (1.7 percent).
Update at 11:30 a.m. ET: The Dow's still down about 220 points (1.8 percent).
Update at 11:25 a.m. ET. Related Wall Street Journal headline: "Dow's Gains For 2012 Disappear."
Update at 11 a.m. ET: The Dow's down about 220 points (1.8 percent).
Update at 10:30 a.m. ET: Over the past 30 minutes the Dow stayed down at least 150 points. Now, it's off by just over 200 (or, about 1.7 percent).
Update at 10 a.m. ET: The Dow's down about 200 points (1.6 percent).
http://www.npr.org/blogs/thetwo-way/2012/06/01/154134531/stocks-drop-on-weak-jobs-news?sc=nl&cc=brk-20120601-1617

How Europe's Double Dip Could Become America's 25APR12

EUROPE'S double dip recession threatens our recovery. The fact that they are in recession again, after implementing the drastic, conservative fiscal policies of their right-wing political parties should be a warning to the American electorate of what will happen to our economy if the repiglicans and tea-baggers win the presidency and Congress this year. From HuffPost.....
Europe is in recession.
Britain's Office for National Statistics confirmed today (Wednesday) that in the first quarter of this year Britain's economy shrank .2 percent, after having contracted .3 percent in the fourth quarter of 2011. (Officially, two quarters of shrinkage make a recession). On Monday Spain officially fell into recession, for the second time in three years. Portugal, Italy, and Greece are already basket cases. It seems highly likely France and Germany are also contracting.
Why should we care? Because a recession in the world's third-largest economy, combined with the current slowdown in the world's second-largest (China), spells trouble for the world's largest.
Remember -- it's a global economy. Money moves across borders at the speed of an electronic impulse. Wall Street banks are enmeshed into a global capital network extending from Frankfurt to Beijing. That means that notwithstanding their efforts to dress up balance sheets, the biggest U.S. banks are more fragile than they've been at any time since 2007.
Meanwhile, goods and services slosh across the globe. If there's not enough demand for them coming from the second and third-largest economies in the world, demand in the U.S. can't possibly make up the difference. That could mean higher unemployment here as well as elsewhere.
What's the problem with Europe? Don't blame it on the so-called "debt crisis." There was no debt crisis in Britain, for example, which is now experiencing its first double-dip recession since the 1970s.
Blame it on austerity economics -- the bizarre view that economic slowdowns are the products of excessive debt, so government should cut spending. Germany's insistence on cutting public budgets has led Europe into a recession swamp.
German Chancellor Angela Merkel, who has led the austerity charge, and other European policy makers who have followed her, have forgotten two critical lessons.
First, that the real issue isn't debt per se but the ratio of the debt to the size of the economy.
In their haste to cut the public debt, Europeans have overlooked the denominator of the equation. By reducing public budgets they've removed a critical source of demand -- at a time when consumers and the private sector are still in the gravitational pull of the Great Recession and can't make up the difference. The obvious result is a massive slowdown that has worsened the ratio of Europe's debt to its total GDP, and is plunging the continent into recession.
A large debt with faster growth is preferable to a smaller debt sitting atop no growth at all. And it's infinitely better than a smaller debt on top of a contracting economy.
The second lesson Merkel and others have overlooked is that the social costs of austerity economics can be huge. It's one thing to cut a government budget when unemployment is low and wages are rising. But if you cut spending during a time of high unemployment and stagnant or declining wages, you're not only causing unemployment to rise even further -- you're also removing the public services and safety nets people depend on, especially when times are tough.
And with high social costs comes political upheaval. On Monday, Netherlands Prime Minister Mark Rutte was forced to resign. U.K. Prime Minister David Cameron is on the ropes. The upcoming election in France is now a tossup -- incumbent Nicolas Sarkozy might well be unseated by Francois Hollande, a Socialist. European fringe parties on the left and the right are gaining ground. Across Europe, record numbers of young people are unemployed -- including many recent college graduates -- and their anger and frustration is adding to the upheaval.
Social and political instability is itself a drag on growth, generating even more uncertainty about the future.
What European policy makers should do is set a target for growth and unemployment -- and continue to increase government spending until those targets are met. Only then should they adopt austerity.
What are the chances that Merkel et al will see the light before Europe plunges into an even deeper recession? Approximately zero.
The danger here for the United States is clear, but there's also a clear lesson. Republicans have become the U.S. party of Angela Merkel, demanding and getting spending cuts at the worst possible time -- and ignoring the economic and social consequences.
Even if the U.S. economy (as well as President Obama's reelection campaign) survives the global slowdown, we're heading for a big dose of austerity economics next January -- when drastic spending cuts are scheduled to kick in, as well as tax increases on the middle class. But the U.S. economy isn't nearly healthy enough to bear this burden.
If nothing is done to reverse course in the interim, we'll be following Europe into a double dip.
Robert Reich, Chancellor's Professor of Public Policy at Berkeley and former
Secretary of Labor, is the author of Beyond Outrage. His widely-read blog can be found at www.robertreich.org.
http://www.huffingtonpost.com/robert-reich/europe-recession-_b_1452743.html?utm_source=Alert-blogger&utm_medium=email&utm_campaign=Email%2BNotifications

S&P Downgrades The Credit Of Nine European Countries, Including France 13JAN12

THIS is not good news for the American economy. A stronger dollar makes exports more expensive, a weaker euro means less sold in Europe, downgrading European countries threatens the financial stability of American financial institutions and banks. Is this the beginning of the double dip? See my post on this blog from 29DEZ11

HARRY DENT OF HS DENT ON NIGHTLY BUSINESS REPORT, BEARISH ON THE ECONOMY 29DEZ11 

This from NPR.....

by Marilyn Geewax and Eyder Peralta

Enlarge Remy de la Mauviniere/AP A trader watches a figure showing the fall of the euro in Paris on Friday. The euro fell to a 17-month low against the dollar on news reports that France's credit rating was downgraded by Standard & Poor's.

Of course the news would come on Friday the 13th.
After a day of leaks and rumors, Standard & Poor's Ratings Services made it official late this afternoon. The credit-rating agency is stripping unlucky France of its AAA credit rating, knocking it down by one notch to AA+.
Also getting knocked down one notch each were Austria, Malta, Slovakia and Slovenia.
S&P gave even worse news to Italy, Spain, Cyprus and Portugal, marking down their debt ratings by two notches each. That downgrade kicked Cyprus and Portugal all the way to "junk" status, where Greece already resides. Ouch.

Those that escaped a downgrade included Germany, Belgium, Ireland, Finland, the Netherlands, Luxembourg and Estonia.
S&P issued a statement saying it lowered the credit ratings because it had determined that "the policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone."
Earlier in the day, French Finance Minister François Baroin admitted the downgrade was coming, but S&P itself waited until after the markets closed at 4 pm ET in this country to make the formal announcement.
Baroin said France's debt problem is now pointed in the right direction, and added that his country would not allow a ratings agency to dictate fiscal policies.
Le Monde, a major French newspaper, reported that Marine Le Pen, leader of France's far-right National Front (FN) party, predicted the loss of France's AAA rating would be "the first step in the breakup of the euro area".
In recent weeks, European leaders have been scrambling to find ways to cope with the problem of too much debt in too many countries. They have managed to hold off any major banking crises, but have not taken any steps bold enough to convince credit raters that all defaults can be avoided.
Friday's downgrade news suggested European political leaders still have a long way to go to clean up massive debt troubles and get the European Union's economy growing again. For France's President Nicolas Sarkozy, the downgrade was an embarrassment that could diminish his chances for re-election this year.
Typically, a credit downgrade — even by just one rating agency — would hurt a country's ability to borrow money cheaply. Investors demand higher interest payments when risks are greater, so no country wants to have anything but the highest rating.
But gauging exactly how much this downgrade will hurt European countries is not exactly clear. Last August, S&P cut the United States' AAA rating for long-term debt by one notch — but interest rates did not shoot up on U.S. debt.
Whether investors go as easy on the European countries remains to be seen as they issue new bonds in coming weeks and months.

Baroin, speaking on French television, said the S&P action was "not good news." But he added that given how many other countries are having debt troubles, the downgrade was "not a catastrophe."
Although the official S&P announcement came after U.S. markets closed, Baroin's statements had been made while trading was still in progress in this country . The reaction was muted. In the end, the Dow Jones industrial average fell only 48.96 to 12,422.06. The value of the euro tumbled Friday to a new 16-month low against the dollar.
We live blogged the news as it happened. Read below for a blow-by-blow look. Note that we re-wrote the top of this post to reflect the news.
 
Update at 5:15 p.m. ET. What Happens Now?:
As we said when the United States' credit rating was cut in August, it's unclear how this cut will affect the Eurozone. But one thing to watch, reports the Wall Street Journal, is a Treasury bill auction the eurozone bailout organization known as the European Financial Stability Facility plans to hold on Tuesday.
Update at 5:13 p.m. ET. Good News For Five Countries:
The S&P also announced it affirmed the ratings of Germany, the Netherlands, Belgium, Estonia, Finland, Ireland and Luxembourg.
Update at 5:06 p.m. ET. Austerity Not Enough:
Reading deeper into the S&P announcement, it's clear the ratings agency is unhappy with the steps taken by European countries to curb the sovereign debt crisis. In short, it says austerity measures are not enough.
"We believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers' rising concerns about job security and disposable incomes, eroding national tax revenues," the S&P said.
Update at 4:55 p.m. ET. Lowering Ratings On Nine Sovereigns:
The S&P has made their cuts to France official and has added eight other European countries to the list. From their press release:

"We have lowered the long-term ratings on Cyprus, Italy, Portugal, and Spain by two notches; lowered the long-term ratings on Austria, France, Malta, Slovakia, and Slovenia, by one notch; and affirmed the long-term ratings on Belgium, Estonia, Finland, Germany, Ireland, Luxembourg, and the Netherlands."

Update at 4:23 p.m. ET. Downgrade 'Long Overdue':
Our Newscast unit just spoke to Peter Morici, an economist and professor of business at the University of Maryland. Morici said this downgrade "was long overdue."
Essentially he said, France has a "systemic risk." With the Euro, the northern countries have flourished, said Morici. In fact, he said if France was valued using its own currency it wouldn't be worth as much. So, now, as the southern European countries face defaulting and the risk of a eurozone split becomes real, any advantage the Euro gives France is gone.
"[The downgrade] is not the end of the world," said Morici. "But it is an indication that the stability and opportunity for growth promised by the creation of the Euro have not come to fruition."
Update at 4:03 p.m. ET. France's National Politics:
French President Nikolas Sarkozy is facing an election. This downgrade will no doubt have an effect on its politics. The Wall Street Journal's Angelique Chrisafis reports from Paris:

"With less than 100 days until the first round of the French presidential race, the credit-rating downgrade in Paris will seriously complicate Nicolas Sarkozy's already difficult bid for re-election.
"'If France loses its AAA, I'm dead,' Sarkozy told aides in October, according to Le Canard Enchaîné. The president has staked his re-election on convincing France that he is the only person with the guts, strength and character to save it from economic doom. The rating cut will seriously dent his image as the Caped Crusader of the financial world."

Update at 3:11 p.m. ET. Shouldn't 'Overrate The Assessments':
Quoting an interview on German television, The Wall Street Journal reports Germany's Finance Minister Wolfgang Schaeuble tried to minimize the significance of a downgrade saying, "In recent months, we have grown to agree world-wide that we shouldn't overrate the assessments of rating agencies. It's not new that there is a great uncertainty in financial markets regarding the euro zone."
Update at 3:09 p.m. ET. Rating The Same As The U.S.:
It's worth noting that a AA+ rating is the same S&P has assigned to the United States.
Update at 3:05 p.m. ET. 'Like Most Of The Eurozone':
In his interview with France 2, Baroin also said France's rating had been lowered one notch "like most of the eurozone."
The AP points out that there is no confirmation from S&P that any other European country has been downgraded. The Guardian runs through what that may mean:

"Of the 17 members of the eurozone, 15 were warned by S&P last month that they could be downgraded. We've heard strong denials from Germany, Finland, the Netherlands and - in the last few minutes - Ireland.
"That leaves ten on the table — Austria, Belgium, Luxembourg,Estonia, Italy, Malta, Portugal, Slovakia, Slovenia and Spain."

Update at 2:56 p.m. ET. The Markets:
As we've said, this announcement was widely expected, so the markets don't seem to be reacting dramatically. The Dow, Nasdaq and the S&P were down less than 0.75 percent.
The AFP reports on the European markets:

"European markets had expected the downgrade, which was widely reported during the day even if Standard and Poor's were not expected to confirm it until later in the evening, and stocks only slid back slightly.
"But the single currency itself was rocked by the news, which coincided with a breakdown in talks to agree a Greek debt writedown, and the euro slipped to 16-month lows against the dollar."

Update at 2:50 p.m. ET. AA Or AA+?
The AP is reporting that S&P cut the rating to AA, but several other news sources, including the Wall Street Journal, The Guardian and France 24, are reporting it's been cut to AA+. We're going with AA+ for now. But we'll revise if we need to.
Update at 2:35 p.m. ET. Rating Cut 'Isn't A Catastrophe':
The Wall Street Journal, which is running a live blog on the news, reports that François Baroin, France's finance minister, sought to minimize the effect the downgrade may have on the country and the eurozone.
In an interview with television station France 2, he said ratings "don't dictate French politics."
"Of course we would have preferred to keep our Triple A credit rating," Baroin said.
Update at 2:25 p.m. ET. No Confirmation From S&P:
NPR's Marilyn Geewax reports S&P has not yet confirmed the downgrade, but it is widely expected they will make an announcement at 4 p.m. ET., after the markets close.
This news was not unexpected. In December, Fitch, another of the major credit rating agencies, assigned France's sovereign debt a negative outlook.