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Jobs Numbers Dampen Obama's Ohio Visit


This is WEEKEND EDITION from NPR News. I'm Scott Simon.

The U.S. jobs market hit the brakes last month. Employers added just 54,000 workers in May. That is the slowest pace of hiring in eight months. The nation's unemployment rate now stands at 9.1 percent, and analysts were quick to note that no president has been reelected with the unemployment rate above 7.2 percent since Franklin Delano Roosevelt.

The gloomy report from the Labor Department overshadowed President Obama's visit to a Chrysler plant in Ohio yesterday. NPR's Scott Horsley reports.

SCOTT HORSLEY: President Obama went to a Toledo plant where Chrysler assembles Jeep Wranglers to celebrate the automaker's comeback since a government-led bankruptcy two years ago. Chrysler repaid its federal loan last week, and Fiat has agreed to buy the government's remaining stake in the company. Sales are up, Chrysler is profitable again and the U.S. auto industry has added 115,000 workers over the last two years.

President BARACK OBAMA: Because of you we can once again say that the best cars in the world are build right here in the U-S of A. Right here in Ohio. Right here in the Midwest.

(Soundbite of applause)

HORSLEY: Mr. Obama told the assembly workers the government's rescue has paid off, not only for Chrysler and General Motors, but for their big network of parts suppliers, and for the Toledo restaurants and other businesses that count on auto workers to be their customers.

Mr. OBAMA: After all, without you, who'd eat at Chet's, or Inky's or Rudy's? Or who'd buy all those cold ones at Zingers?

(Soundbite of laughter)

Mr. OBAMA: The celebration was marred, though, by the disappointing report on May job growth. With so few jobs added, unemployment inched up to 9.1 percent. Mr. Obama acknowledged the economy still has a long way to go.

Mr. OBAMA: There are always going to be bumps on the road to recovery. We're going to pass through some rough terrain that even a Wrangler would have a hard time with. We know that.


HORSLEY: The big question is whether this slowdown is just a bump in the road from which hiring will soon accelerate, or the beginning of a more worrisome trend. Forecasters had expected some drop-off in hiring, as a result of high gas prices and supply disruptions following the Japanese tsunami.

But economist Robert Dye of PNC Financial Services says even with that low bar, yesterday's jobs report fell short.

Mr. ROBERT DYE (Senior Economist, PNC Financial Services): The thing that makes everyone sit up and take notice is simply because the other data has been weak and we can't brush this off as a unique, one-off type event. This is an indication that the economy is in worse shape than we thought it was.

HORSLEY: Dye thinks until the housing market recovers and consumers are willing to spend freely again, hiring is likely to remain stuck in low gear. And don't look for the kind of aggressive government help that rescued Chrysler.

Mr. DYE: There is no appetite for dipping back into the budget and saying we need another stimulus program. We need to accelerate federal spending to get the economy moving. That's not going to happen.

HORSLEY: The big push in Washington this summer is finding ways to cut government spending, not increase it. The president's economic advisor, Austan Goolsbee says times have changed in the last two years.

Mr. AUSTAN GOOLSBEE (Presidential Economic Advisor): We've clearly transitioned away from teetering on the edge of depression to fragile recovery and I think the president's been pretty clear that the main driver of recovery has got to be the private sector.

HORSLEY: And until demand picks up, the private sector will be in no hurry to hire. Like many economists, PNC's Dye has lowered his forecast of economic growth for the second half of the year to just 3 percent. That's not much encouragement for the millions of people still looking for work.

Mr. DYE: My expectation is that we do generate enough jobs to bring the unemployment rate down slowly but slowly is the key word. I think if we're lucky we finish the year maybe around eight-and-a-half and keep going from there.

HORSLEY: Unemployment at that level could spell trouble for the President as he tries to hang onto his own job in 2012.

Scott Horsley, NPR News, the White House. Transcript provided by NPR, Copyright NPR.