Many analysts suggest the economy will improve later this year, particularly if gas prices continue to decline.
But Friday’s report underscores that the recovery will likely remain weak and unemployment high for many months.
“The recovery has not been derailed, but it’s slow,’’ said Michelle Meyer, an economist at Bank of America Merrill Lynch. “We’re still in a muddle-through period.’’
Among the deepest job cuts were in local governments, which 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 poses a challenge to President Barack Obama’s re-election prospects next year. The Conference Board, a business research group, predicts that the unemployment rate will be 8.5 percent by the end of next year. That would mean Obama would face re-election with a higher unemployment rate than any other post-war president has.
Yet there’s little appetite on Capitol Hill for additional stimulus spending. And the Federal Reserve plans to wrap up its most recent effort to pump money into the economy at the end of this month.
White House economist Austan Goolsbee said the burden is now on the private sector to create jobs, as the days of a government-led recovery are nearing an end.
“You’ve seen corporate profits high,’’ he said. “It’s now time to get that translated … into the adding of jobs, building of factories and buying of equipment here at home.’’
The jobs report followed a string of sluggish economic data in the past month that suggest the economy is growing more slowly.
The manufacturing sector, a key driver of the recovery, grew at its slowest pace in 20 months in May. Home prices in big metro areas have reached their lowest level since 2002.
