Well, it's just completely awful.
The Labor Department just released its May jobs report, and the numbers are even worse than the pessimists projected. We added only 69,000 jobs in May. Economists had expected 150,000, and the ADP report, which came out earlier this week, anticipated 133,000.
The unemployment rate moved up, to 8.2 percent from 8.1 percent. What's worse, the data for April was revised down, reversing a trend of the Bureau of Labor Statistics (BLS) revising the previous month's numbers up. In April, we actually added only 77,000 jobs, versus the originally reported — and rather disappointing — 115,000.
The only positive news in this dismal May report is that the labor participation rate edged up a tiny amount, to 63.8 percent. It's still at a low level not seen since the early 1980s. And people dropping out of the workforce — basically giving up on finding a job or deciding to wait out a bad economy — is no longer keeping a lid on the unemployment rate moving back up.
I wrote yesterday that I thought we'd be lucky to make 100,000 jobs added for May. Obviously, we didn't get anywhere near that, missing even my cautiously pessimistic prediction by 30,000 jobs. Right now, we don't have strong enough GDP growth to deliver even a modest recovery — the first quarter was recently revised down, to 1.9 percent. The fourth quarter of 2011 saw 3 percent. We need something like 2.5 to enable the jobs market to add around 200,000 new positions each month, which is a far cry from the 300-400,000 required to really move the headline unemployment rate down.
Bottom line: As in 2010 and 2011, after an encouraging start, the U.S. economy has ground to a halt just in time for summer.
In California, this is dreadful news, as our unemployment rate is running at nearly 11 percent. Ominously, construction employment took a decent-size hit in May, which suggests that the long-awaited housing recovery may be even longer-awaited. California was disproportionately affected by the housing downturn, so until we see some steady progress on this front, our unemployment rate is going to remain well above the national level.
I was worried yesterday about a surprise to the downside on the May numbers. Sadly, that's just what we got.
UPDATE: The markets weren't expecting it to be this bad. Bad jobs report plus euro crisis could equal the Dow dropping close to 12,000 today.