MELISSA BLOCK, HOST:
This is ALL THINGS CONSIDERED, from NPR News. I'm Melissa Block.
ROBERT SIEGEL, HOST:
And I'm Robert Siegel. It was the worst day of the year on the stock market. The Dow fell 274 points, putting the index back into negative territory for the year. The big reason? The latest monthly jobs report came in far weaker than expected. In May, the economy added just 69,000 new jobs.
The Labor Department report also showed the unemployment rate rising to 8.2 percent, no doubt unwelcome news at the White House. In a few minutes, we'll talk through the political effect of today's news with David Brooks and E.J. Dionne. But first, NPR's John Ydstie dissects the numbers for us.
JOHN YDSTIE, BYLINE: It wasn't just the disappointing job number for May that rattled markets and surprised economists. A downward revision of job growth for the previous two months, of 49,000, also contributed to the unease. That means for the past three months, the economy has produced on average, only 73,000 new jobs per month - about one-third the pace for the first three months of the year.
Wells Fargo chief economist John Silvia says the warmer than normal winter weather continues to affect the numbers. Job growth in the winter months was much higher than expected. Silvia says that's thrown off the seasonal adjustments that the Labor Department uses to smooth out the employment numbers.
JOHN SILVIA: They made the numbers stronger in November to February and now, they're weakening the numbers. And we see this most clearly in the construction data.
YDSTIE: Silvia says some recent positive data on home-building suggests we should see added construction jobs. But May's report showed a loss of 28,000 construction jobs instead. Another drag on job growth is the cutback in government jobs, which continued in May. Finally, says Silvia, the economic turmoil in Europe is having a negative impact on U.S. hiring, including hiring by manufacturers.
SILVIA: The pace of those gains are more modest than the past. And I think Europe has introduced a lot of uncertainty, in terms of the markets for goods produced in the United States to be sold into Europe.
YDSTIE: But it's not just manufacturing that's being affected by concerns about Europe.
ARIE BALL: I mean, I think that it adds to the business uncertainly that - for all U.S. companies.
YDSTIE: That's Arie Ball, vice president for talent acquisition at Sodexo. The company is a multinational that provides a variety of services, including facilities management and food services. Ball says despite the uncertainty, Sodexo, which has 125,000 employees in the U.S., has not scaled back hiring plans for this year - yet.
BALL: Right now, we are projecting to be hiring this summer at about the same pace that we did last summer.
YDSTIE: As for the unemployment rate, which moved up to 8.2 percent, Princeton economist Alan Blinder, a former vice chairman of the Federal Reserve, says remember: The number is based on a survey.
ALAN BLINDER: You know, it's funny. People are used to - in presidential polling, if it's within three points, they say it's within the margin of error; it's a tie. But when it comes to the unemployment rate, if it moves by a tenth, everybody gets excited.
YDSTIE: And 8.2 percent is not statistically different from 8.1 percent, he says. But any rise in the unemployment rate is politically significant in a presidential election year. Today, the presumptive Republican nominee, Mitt Romney, jumped on the weak jobs report, blaming the president's policies. And Romney said it was very bad news for the middle-class families of America.
At a visit to a Honeywell plant in Minnesota, President Obama countered by blaming Congress.
PRESIDENT BARACK OBAMA: Instead of just talking about job creators, Congress should give small-business owners a tax break for hiring more workers and paying them higher wages. We can get that done. We can get it done right now. Let's not wait.
YDSTIE: While action on the president's job creation proposals is unlikely in the coming months, the argument over who's to blame for slow job growth no doubt will be with us until the November election.
John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.