Obama, Romney spar over figures

The economy added only 69,000 jobs in May, a result much worse than expected that will heighten fears the economy is sliding once again into a spring slowdown. 

The report from the Bureau of Labor Statistics also revised figures for March and April downward, finding the economy created 49,000 fewer jobs than once thought in those two months. The jobless rate rose from 8.1 percent to 8.2 percent. 

Stocks fell on the news, with the Dow Jones Industrial Average losing more than 200 points in early trading.

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The report underperformed expectations the economy would add as many as 165,000 jobs and could represent a critical turning point in the presidential race between Republican Mitt Romney and President Obama. 

Romney has hammered Obama's performance on the economy, and the May report is the strongest evidence yet that the labor market is underperforming. It comes after stronger job growth at the beginning of the year, but a slowdown in job creation over the past two months. 

Obama on Friday said his administration knew the road to recovery "wouldn't be easy."

"The economy is growing again but it's not growing as fast as we want it to grow," he said in a speech in Golden Valley, Minn. "We've got a lot of work to do until we get to where we need to be." 

But, he vowed, "We will come back stronger. We do have better days ahead and that's because of you."

In a statement, Romney called May's report "devastating news" for workers and families.

"This week has seen a cascade of one bad piece of economic news after another," he said. "It is now clear to everyone that President Obama’s policies have failed to achieve their goals and that the Obama economy is crushing America’s middle class."

In a later interview on CNBC, Romney blasted Obama for taking his eye off the economy to pursue the healthcare law. 

One former senior administration official called the jobs numbers "not good" and used a bit of gallows humor to get through the moment: "We haven't had an 'oh sh*t' moment since Joe Biden was on 'Meet the Press' " discussing his support for gay marriage.

"I don't think this helps," the former official said. "I don't think it's good."

Alan Krueger, chairman of the Council of Economic Advisers, argued on Friday that the economy is still battling back from the loss of 8.8 million jobs over a 25-month period beginning in February 2008. "Problems in the job market were long in the making and will not be solved overnight," he said. "We are still fighting back from the worst economic crisis since the Great Depression."

The economy has added jobs every month since September 2010, and the former administration official said "there's still a pretty good bell curve" for the administration on jobs.

The pattern of the last several months is eerily similar to the pattern of the past two years, when stronger growth in the winter months raised false hopes that the economy was performing more strongly than it was.

"There is nothing very redeeming about this report, it's pretty ugly all the way around," said Mark Zandi, chief economist for Moody's Analytics. 

Zandi, who had predicted a May comeback with 165,000 jobs added, called the report weak and said the figure likely still reflects some "payback" from the warm winter, when job growth exceeded the economic expansion. 

"No matter how you slice it, it suggests that the economy's growth rate has slowed going into the spring and summer," he said.

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Congressional Republicans immediately seized on the report — the worst since May 2011, when the economy added only 54,000 jobs — to argue Obama's policies have been ineffective. 

“President Obama’s failed policies have made high unemployment and a weak economy the sad new normal for families and small businesses," House Speaker John Boehner (R-Ohio) said. 

In recent months the unemployment rate has dropped as discouraged workers stopped looking for jobs.

But in May, the labor force added 642,000 workers, the largest amount since a month before the recession started, which is usually a signal that confidence in the labor market is improving. After falling to a 30-year low of 63.6 percent, the nation's labor participation rate picked up slightly, to 63.8 percent, offsetting the April decline.

Meanwhile, the number of unemployed workers grew by 220,000, pushing up the total to 12.7 million, although the figure is well below the 13.9 million from a year ago.

The number of long-term unemployed, those out of work for six or more months, also jumped to 5.4 million, up from 5.1 million in April.

The service sector is providing the bulk of jobs gains as the healthcare sector added 33,000 jobs and transportation tacked on 36,000, while employment in wholesale trade rose by 16,000 over the month. Since reaching an employment low in May 2010, this industry has added 184,000 jobs.

Manufacturing employment chugged along, adding 12,000 jobs, slightly ahead of the 9,000 in April.

Senate Majority Leader Harry Reid (D-Nev.) used the report to call on Democrats and Republicans to work together to pass legislation to bolster the economy.

"This report is a sharp reminder that Democrats and Republicans should be working together to strengthen our economy, create jobs and put the middle class ahead of partisan politics," Reid said.

He called for action on legislation that would cut taxes for small businesses, prevent student loan rates from doubling on July 1 and ensure women get paid the same amount as men for performing the same work.

The Nevada Democrat also said Congress should pass a measure that provides incentives to companies to create manufacturing jobs in the United States and step up efforts to accelerate the housing market's recovery.

“But all of these policies require bipartisan cooperation, something that, sadly, has been in short supply. I hope my Republican colleagues will take this as an opportunity to work with Democrats for the good of the middle class.”

—This story was posted at 8:30 a.m. and last updated at 1:43 p.m.

Amie Parnes contributed to this story.

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