Plus: U.S. Factory Orders Fall and Hiring Slows to a Crawl.

U.S. Hiring Slows
Hiring in the United States slowed to a crawl in May and the unemployment rate moved higher, according to the U.S. Department of Labor on Friday. Following an increase of 232,000 jobs in April, the U.S. added 54,000 non-farm payroll jobs last month, while the unemployment rate edged up from 9 percent to 9.1 percent in May, the highest unemployment rate since December.

“Economists blamed the slowdown on higher gasoline prices and a slowdown in manufacturing caused by lack of parts from earthquake-wracked Japan,” MarketWatch explains. Manufacturers ended a six-month streak of job gains, eliminating 5,000 jobs in May.

“Private companies added jobs, but the pace of hiring fell to its lowest level in a year,” the New York Times reports. “The biggest gains were in professional and business services and in health care services, which grew steadily even during the recession.

“Economists said that the pace of job growth thus far has been too slow to reverse much of the damage wrought by the recession, which has left nearly 14 million people unemployed,” the Times continues. “Six million have now been out of work for more than six months.”

Consumer Confidence Turns Pessimistic
Americans are less confident that the economy will continue improving, according to The Conference Board’s latest monthly Consumer Confidence Index, which dropped in May following a rise in April. The index now stands at 60.8, down from a revised 66 reading in April.

Economists had expected an increase to 67, according to the Associated Press. The May index marked the lowest reading since November.

The unexpected decline was attributed to increased pessimism about the job market, in addition to higher food and fuel costs.

“A more pessimistic outlook is the primary reason for [May's] decline in consumer confidence. Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects. Inflation concerns, which had eased [in April], have picked up once again,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.

While consumers’ short-term outlook turned pessimistic in May, falling from 83.2 to 75.2, their assessment of current conditions “declined only modestly” — from 40.2 to 39.3 — “suggesting no significant pickup or deterioration in the pace of growth,” Franco noted.

U.S. Factory Orders Fall
New orders for manufactured goods decreased 1.2 percent in April to total $440.4 billion, according to the U.S. Department of Commerce last week. This followed a revised 3.8 percent gain in March and marked “the biggest decrease since May 2010,” Bloomberg News reports.

Economists projected a 1 percent decline in April, according to the median forecast in a Bloomberg News survey. Excluding transportation, new orders dropped 0.2 percent.

Orders for durable goods fell 3.6 percent to total $190.3 billion in April, unchanged from the previously published decrease. This followed a 4.6 percent increase in March. Transportation equipment had the largest decrease, dropping 9.3 percent to total $46.9 billion. New orders for manufactured non-durable goods increased 0.6 percent to total $250.1 billion.

Meanwhile, shipments dropped 0.2 percent to $444.5 billion, following a 3.1 percent increase in March. Unfilled orders edged up 0.3 percent to $850.7 billion after a 0.7 rise in March. Inventories rose 1.3 percent to $587.8 billion, down slightly from a 1.4 percent increase in March.

“One of the factors boosting U.S. manufacturing has been a surge in export sales,” the Associated Press notes. “A weaker dollar has made U.S. goods cheaper in foreign markets.”