LITTLE ROCK — The American jobs engine sputtered in May as employers added the fewest workers in a year and the unemployment rate rose to 8.2 percent, the Labor Department said Friday.
Payrolls climbed by 69,000 last month, less than the most pessimistic forecast in a Bloomberg News survey, after a revised 77,000 gain in April that was smaller than initially estimated.
The nation’s unemployment rate in April was 8.1 percent. In Arkansas, the unemployment rate in April was 7.2 percent.
“The picture is getting more worrisome,” said Bruce Kasman, chief economist for JPMorgan Chase & Co. in New York. “The U.S. economy is going to be somewhat softer over the next couple of quarters.”
Stocks tumbled, erasing the 2012 advance in the Dow Jones industrial average. The Dow fell 274.88 points, or 2.2 percent, to 12,118.57.
May was the worst month for the stock market in two years by some measures. Investors’ worries about Europe’s debt crisis intensified as the month wore on.
Friday’s jobs report drew traders’ attention back to the weakening U.S. economy, said Todd Salamone, direc- tor of research for Schaeffer’s Investment Research in Cincinnati.
“The weaker jobs report translates into anticipation of slower growth ahead and weaker corporate earnings, and that ratchets stock prices lower,” Salamone said.
Other U.S. economic data released Friday pointed to bright spots for the economy, as manufacturing maintained its expansion and consumers stepped up spending.
Estimates of the 87 economists surveyed for the unemployment report ranged from May payroll increases of 75,000 to 195,000 after a previously reported 115,000 rise in April. Revisions subtracted a total of 49,000 jobs from payroll growth in March and April.
The unemployment rate was forecast to hold at 8.1 percent, according to the survey median. Unemployment has exceeded 8 percent since February 2009, the longest such stretch since monthly records began in 1948.
The number of people unemployed for 27 weeks or more rose as a percentage of all jobless, to 42.8 percent from 41.3 percent.
Mitt Romney, the presumptive Republican nominee in the November presidential election, seized on the job figures to attack President Barack Obama.
“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,” Romney said in a statement.
The administration, seeking to blunt the political impact, highlighted private payroll gains over the past 27 months while promoting measures Obama has proposed to increase hiring.
Obama said the jobs report shows the U.S. economy is not creating jobs “as fast as we want” but the economy will improve.
“We will come back stronger,” Obama said. “We do have better days ahead.”
Private payrolls, which exclude government agencies, rose 82,000 in May after a revised gain of 87,000 in April.
Analysts said Friday’s unemployment report increases the odds that Federal Reserve policymakers led by Chairman Ben Bernanke will take further action to stimulate the economy when they next meet June 19. Operation Twist, a program to extend the maturities of bonds on the Fed’s balance sheet, expires this month.
Eric Rosengren, president of the Federal Reserve Bank of Boston, said in an interview before Friday’s report that the central bank should prolong the program.
“That would have the impact of helping to reduce longer-term interest rates without expanding our balance sheet,” Rosengren said Thursday.
Other Fed policymakers may join him in supporting an extension, said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, N.C.
“My feeling is that because the slowdown in the economy has been fairly rapid compared to what they expected, that they’ll go ahead and extend Operation Twist,” he said.
Factory employment in May increased by 12,000, less than the survey forecast of a 15,000 increase. Among companies adding to payrolls is General Motors Co., the world’s biggest automaker, which said last month that it will add 600 employees to a second shift at an assembly plant in Lansing, Mich., according to the Detroit News.
Construction companies cut 28,000 jobs, the most in two years, and retailers increased payrolls by 2,300. Government payrolls declined by 13,000. Employment at service providers increased 84,000 in May.
The so-called underemployment rate — which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking — increased to 14.8 percent from 14.5 percent.
Faster economic growth would help lay the groundwork for more hiring, but the nation’s gross domestic product climbed at a 1.9 percent annual rate from January through March, down from a 2.2 percent prior estimate, reflecting smaller gains in inventories and bigger government cutbacks, according to revised Commerce Department figures released Thursday.
Information for this article was contributed by Timothy R. Homan, Steve Matthews, Aki Ito, Rich Miller and Chris Middleton of Bloomberg News and by Daniel Wagner and Jim Kuhnhenn of The Associated Press.
Front Section, Pages 1 on 06/02/2012