Employers added 54K jobs, rate ticks up to 9.1 pct

WASHINGTON — American employers hired only 54,000 new workers in May, the fewest in eight months, and the unemployment rate rose to 9.1 percent.

The Labor Department report offered startling evidence that the U.S. economy is slowing, hampered by high gas prices and natural disasters in Japan that have hurt U.S. manufacturers.

Job seekers Adriana Miunoz, 20, second from left, and Isha Hawkins 19, register for jobs at the 10th annual Skid Row Career Fair held at the Los Angeles Mission downtown Los Angeles Thursday. Employers hired only 54,000 new workers in May, the fewest in eight months, and the unemployment rate rose to 9.1 percent.

The pace of hiring has weakened dramatically from the previous three months, when the economy added an average of 220,000 new jobs. Private companies hired only 83,000 new workers in May — the fewest in nearly a year.

Stock futures plunged after the report was released.

Local governments cut 28,000 jobs last month, the most since November. Nearly 18,000 of those jobs were in education.

Cities and counties have cut jobs for 22 straight months and have shed 446,000 positions since September 2008.

The anemic pace of job creation presents a huge challenge to President Barack Obama's reelection prospects next year. And it followed a string of disappointing economic data in the past month that suggest the economy is hitting a soft patch after a strong start.

The manufacturing sector, a key driver of the economic recovery, grew at its slowest pace in 20 months in May. Home prices are still falling and reached their lowest level since 2002 in March.

Higher gas prices have left less money for consumers to spend on other purchases. And average wages aren't even keeping up with inflation. As a result, consumer spending, which fuels about 70 percent of the economy, is growing sluggishly.

More people entered the work force in May. But most of the new entrants couldn't find work. That pushed the unemployment rate up from 9.0 percent in April. The number of unemployed rose to 13.9 million.

And the government revised the previous months' job totals to show 39,000 fewer jobs were created in March and April than first thought.