May Unemployment Rises to 8.2 Pct.
Jobs additions were anemic in May, Labor Department reports.
June 1, 2012 — -- The nation's jobs picture dimmed in May as employers added just 69,000 jobs and the unemployment rate ticked up to 8.2 percent, a continuation of a long, slow employment recovery that began 33 months ago.
Economists had expected 150,000 new jobs and the jobless rate to stay at 8.1 percent, according to Bloomberg. Stocks, which had their worst month in two years in May, fell on the news with the Dow Jones industrials opening down 170 points.
Last month, the Labor Department reported 77,000 jobs were added in April, revised down today from 115,000 for an unemployment rate of 8.1 percent, a drop of one-tenth of a point from the previous month.
Brian Hamilton, CEO of financial information company Sageworks, said the U.S. economy, which has 12.7 million unemployed people, should be generating more jobs at this stage of the recovery.
"This is a paradox because privately held companies, which actually produce the vast majority of new jobs, are performing quite well as they continue to experience higher revenue and profits," he said. "There are many theories about why jobs are not being created, especially in this political season, but the truth is no one really knows for sure why the economy is growing and jobs are not being created."
Economists generally agree that a healthy economy must create at least 200,000 jobs a month and the unemployment rate needs to fall to 6 percent or below -- something the US hasn't seen since before the financial meltdown of 2007 to 2008.
Those who have plagued by long-term unemployment may distort the unemployment rate, though the labor force rate provides added insight into the country's jobs picture.
The labor force participation rate increased 0.2 percent to 63.8 percent in May. The employment-population ratio increased to 58.6 percent in May from 58.4 percent in April.
Other jobs reports showed a mixed view of the country's labor market.
On Thursday, the Labor Department reported unemployment claims were up 10,000 last week to 383,000 – the largest number in more than a month. Payroll processing firm ADP said the same day that private employers added 133,000 jobs this month, an increase from April's 113,000 new hires.
Economists say there may be several reasons why companies aren't hiring in huge numbers despite reporting strong profits, including concerns about the debt crisis in Europe and anticipation ahead of the presidential election.
Sageworks recently published a survey of financial professionals of private companies, asking why employers are delaying hiring.
About 32 percent of financial professionals surveyed said their clients aren't hiring because they are concerned about the economy in general, while another 22 percent said private companies have become more risk-averse because of lingering anxiety from the last recession.
"Private companies, which are responsible for about 65 percent of new job growth, need to hear some good news before they start hiring," Libby Bierman, analyst with Sageworks, said. "If business owners hear that other companies are hiring, then they may feel more comfortable putting out a "Now Hiring" sign."
ABC News' Richard Davies and Zunaira Zaki contributed to this report.
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