Compounding problems: Economy in despair; Fed may intervene

WASHINGTON: US job growth braked sharply for a third straight month in May and the unemployment rate rose for the first time in nearly a year, raising chances of further monetary stimulus from the Federal Reserve to support the sputtering recovery. Employers added a paltry 69,000 jobs to their payrolls last month, the least since May of last year, and 49,000 fewer jobs were created in the previous two months than had been thought, the Labor Department said on Friday. The jobless rate rose to 8.2% in May from 8.1% in April. The data offered the clearest evidence yet that the deepening debt crisis in Europe and a slowdown in China were starting to dampen an already lackluster US recovery. Concerns over the course of US fiscal policy may also be weighing. Investors rushed into the safety of US government bonds, pushing the yield on the benchmark 10-year treasury note to a record low below 1.5%.

Published in The Express Tribune, June 3^rd, 2012.