WASHINGTON – Another bad month for the U.S. job market is lengthening the list of perils facing the global economy.

American employers added only 69,000 jobs in May, the fewest in a year and not even close to what economists expected. For the first time since June, the unemployment rate rose, to 8.2 percent from 8.1 percent.

It was the third month in a row of weak job growth and further evidence that, just as in 2010 and 2011, a winter of hope for the economy has turned to a spring of disappointment.

“This is horrible,” said Ian Shepherdson, chief economist at High Frequency Economics, a consulting firm.

The job figures, released Friday by the Labor Department, dealt a blow to President Barack Obama at the start of a general election campaign that will turn on the economy.

They also deepened the pessimism of investors, who even before the report was released were worried about a debt crisis in Europe with no sign of solution and signs of a slowdown in the powerhouse economy of China.

“The U.S. is not an island, and what happens abroad matters here,” said Diane Swonk, chief economist at Mesirow Financial. “The weakness in Europe, in particular, has a global reach and is affecting us.”

The Dow Jones industrial average fell 275 points, its worst day of the year, and for the first time was down for 2012. The Standard & Poor’s 500 index is almost 10 percent below its 2012 high, the traditional definition of a market correction.

Mitt Romney, who on Tuesday cleared the number of convention delegates required to win the Republican presidential nomination, told CNBC that the report was “devastating.”

He called for an emphasis on energy development, pledged to “kill” the health care overhaul that Obama saw through in 2010 and said he would reduce taxes and government spending. The clearest fix for the economy, he said, was to defeat 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,” said Romney, the former Massachusetts governor.

Obama, in Minnesota, pushed a proposal to expand job opportunities for veterans returning from Iraq and Afghanistan. He said that the economy is not creating jobs “as fast as we want” but vowed that it would improve.

“We will come back stronger,” he said. “We do have better days ahead.”

Alan Krueger, head of the president’s Council of Economic Advisers, pointed out that the country has added jobs for 27 months in a row, including 4.3 million jobs in the private sector. The economy still has a few bright spots. Americans bought cars and trucks a strong pace last month, giving automakers their best May since 2008.

Underscoring the challenge for Obama with five months to go in the campaign, a May poll by The Associated Press and GfK, a research company, showed that 52 percent disapproved of Obama’s handling of the economy while 46 percent approved.

Some financial analysts said that the dismal job figures put pressure on the Federal Reserve to take additional steps to help the economy, but it was not clear how much good the Fed could do beyond trying to inspire confidence.

The central bank has already kept the short-term interest rate it controls at a record low of almost zero since the fall of 2008, during the financial crisis, and pledged to keep it there through late 2014.

It has undertaken two rounds of massive purchases of government bonds, starting in March 2009 and November 2010, to help drive long-term interest rates down and stimulate stock prices. Another program to lower long-term interest rates, known as Operation Twist, was announced last September and ends in June.

But low interest rates, other analysts pointed out, are not the problem. An investor stampede into bonds on Friday drove the yield on the 10-year U.S. Treasury note as low as 1.44 percent, the lowest on record.

Fed Chairman Ben Bernanke testifies next week before a joint committee of Congress, and the Fed next meets June 19 and 20.

Complicating the challenge for the economy, tax cuts passed under President George W. Bush will expire after Dec. 31, as will a cut in the Social Security payroll tax. More than $100 billion in automatic spending cuts to defense and domestic programs also kick in Jan. 1. Less money in consumers’ pockets next year and less spending by the government would be a significant drag on the economy.

Congress could extend the tax cuts, but Republicans control the House of Representatives, and they have little political incentive to help Obama in the November election by doing so.

The Congressional Budget Office has said the tax increases and spending cuts would cause the economy to shrink at an annual rate of 1.3 percent in the first half of next year. The economy grew at a 1.9 percent annual rate in the first quarter of this year.

And there is little significant action that the White House can take on its own.

Meanwhile, the global economy’s troubles continue to pile up.

Europe has grappled for more than two years with the crippling debt owed by many of its countries, and leaders remain divided over how to solve it. Stronger countries like Germany have insisted on government spending cuts, but voters in weaker countries are in no mood for further fiscal pain. Unemployment in the 17 countries that use the euro countries is a record 11 percent.

Spain insisted Friday that it is financially stable, but its borrowing costs are creeping close to the 7 percent level that forced Greece, Ireland and Portugal to seek international bailouts.

And even fast-growing economies in the developing world appear to be slowing.

India reported Thursday that its economy grew just 5.3 percent in the January-March quarter, slowest in nine years. And manufacturing in China, the world’s second-largest economy after the United States and one of the fastest-growing, barely grew in May.

The U.S. government uses a survey of mostly large businesses and government agencies to determine how many jobs are added or lost each month. That is the survey that produced the 69,000 number.

It uses a separate survey of American households to calculate the unemployment rate. That survey picks up hiring by companies of all sizes, including small businesses, companies being started, farm workers and the self-employed.

The household survey found that 422,000 more Americans had jobs in May than in April. But the work force grew by 642,000 as more Americans who hadn’t been looking for work started to look. That is why the unemployment rate inched up from 8.1 percent to 8.2 percent.

The economy lost 28,000 construction jobs, the worst for that industry in two years, and 13,000 government jobs. A category of employers called “leisure and hospitality” cut almost 9,000, mostly at amusement parks, museums and casinos.

And March and April, already disappointing months for job creation, were not as strong as first thought. The government revised the job-growth totals lower by 11,000 to 143,000 for March and by 38,000 to 77,000 for April.

From December through February, the economy added an average 252,000 jobs per month.

“There is virtually nothing positive in this report if you are trying to build a case for an economy that is supposed to be in recovery mode and gaining momentum,” said Tom Porcelli, chief U.S. economist for RBC Capital Markets.

Investors made their disappointment clear.

The Dow, the S&P 500 and the Nasdaq composite index all fell by more than 2 percent. The S&P, which was up 12 percent for the year through March, was left with a slender gain of 1.6 percent.

Homebuilder stocks fell the most, apparently because the dismal picture for the U.S. economy outweighed a report that construction spending rose for a second month in April.

The price of gold, which some investors have often bought over the past three years for safety in turbulent economic times, climbed $58 an ounce, to $1,622, the highest since early May.

Anticipating weaker world demand, investors drove down the price of oil by $3.49 a barrel to $83.04, the lowest since October and 24 percent below its peak of $109.77 in February.

That will at least provide help for American drivers: The price of gasoline, which peaked at an average of $3.94 a gallon in April, has fallen to $3.61. It is below $3 in parts of South Carolina, and the national average should be below $3.50 soon.

Business owners cited a range of reasons for pulling back on hiring in May. Some said sales had been hurt by the weak economy in Europe. Others, like a California road construction company, said slower government spending was costing them.

But in interviews Friday, most expressed general uncertainty about the U.S. economy.

Alan Gaynor’s architectural design firm in New York, Alan Gaynor & Co., isn’t hiring because his clients, real estate developers, are uneasy about starting projects.

“It’s a wait-and-see attitude they have. Everyone’s a little nervous. The economy’s growing a lot slower than anyone would have liked,” said Gaynor, who has 15 employees, the same as a year ago.

Still other businesses cited tight credit, a vestige of the 2008 financial crisis.

Robert Stewart Inc., a 93-year-old New Jersey company that makes neckties, wants to add five or six workers to its staff of 18, and business is up, said Steven Wishnew, the company’s operations director.

But the company can’t get the $50,000 to $100,000 in credit that would “kick-start our engine,” he said, and sellers that used to give them 90 days to pay now demand payment in advance.

The bank wants the company’s owners to put up their homes as collateral for a loan or line of credit, he said.

“You have to be insane to do that,” Wishnew said. “Who knows where this economy is going?”

—

AP Writers Martin Crutsinger, Christopher S. Rugaber, Liz Sidoti, Darlene Superville and Daniel Wagner in Washington and Jonathan Fahey and Joyce M. Rosenberg in New York contributed to this report.

A service of YellowBrix, Inc.

WASHINGTON – The U.S. economy suddenly looks a lot weaker.

Only 69,000 jobs were added in May, the fewest in a year, and the unemployment rate rose from 8.1 percent to 8.2 percent.

The dismal jobs data will heighten fears that the economy is sputtering. It also puts President Barack Obama on the defensive five months before his re-election bid.

The Labor Department also said Friday that the economy added far fewer jobs in the previous two months than first thought – 11,000 fewer in March and 38,000 fewer in April. And the increase in unemployment was the first in 11 months.

Job creation is the fuel for the nation’s economic growth. When more people have jobs, more consumers have money to spend – and consumer spending drives about 70 of the economy.

—

Here’s what The Associated Press’ reporters are finding:

—

POLITICAL GRIDLOCK

Democrats and Republicans talk a lot about job creation. But a sharply divided Congress could end up being a job killer. Unless lawmakers intervene by the end of the year, income tax cuts will expire and $100 billion in spending cuts will kick in.

The Congressional Budget Office estimates that would cause the economy to shrink in the first half of 2013. That would meet the traditional definition of a recession: when the economy shrinks for two consecutive quarters.

The conventional wisdom is that at the last minute, lawmakers will prevent the country from falling off the so-called fiscal cliff. But until they do, economists say many businesses will remain reluctant to hire.

—

RECESSION RISK?

The hiring slowdown isn’t likely a harbinger of another recession. But Friday’s jobs report was so bleak that it at least injected the topic into conversation.

Either of two events would make a recession more likely, said Brian Bethune, an economics professor at Gordon College in Massachusetts: If the 17 nations that use the euro were to end their currency alliance. Or if Congress failed to reach a compromise to extend income tax cuts set to expire at year’s end and avoid cuts to defense and domestic programs.

The economy remains stronger than it was in August, when a downgrade of the United States’ long-term credit led some analysts to warn that another recession could occur, said Mark Vitner, an economist at Wells Fargo Securities.

“The odds of recession today are considerably less than they were last August,” Vitner said. “More states are seeing improvement, and more industries are recovering that at any time since the recession ended.”

– Christopher S. Rugaber, AP Economics Writer

—

A PENNY HERE, A PENNY THERE

A slowdown in hiring hurts even those who do have jobs because employers have less incentive to give raises.

That trend continued in May. The average hourly wage rose just two pennies, to $23.41.

Pay has risen 1.7 percent in the past year. That’s the smaller 12-month gain since December 2010. It’s even slower than the rate of inflation, which means many people can afford less on what they are earning.

– Christopher S. Rugaber, AP Economics Writer

—

JOBS LOST TO AUTOMATION

“We’re not hiring, and we’re not replacing” workers who leave, said Joe Glenn, who runs Glenn Metalcraft in Princeton, Minn.

Not because business isn’t good. Sales jumped 40 percent last year. But over the past five years, his shop has kept employment flat at about 35 workers. Instead, he’s added more computer-controlled metalworking machines and robots to load the raw material into them.

His shop is so busy that he runs an overnight shift to keep the machines running, making parts for trailers that haul sand to oil fields in North Dakota and parts for farm and construction equipment. But he needs fewer workers to make those parts.

“I think we’re producing as much as we were with a lot less manpower, and I don’t foresee that those jobs are going to come back,” Glenn said.

– Joshua Freed, AP Business Writer

—

PAIN ON WALL STREET

The jobs report spread gloom among investors. The Dow Jones industrial average shed about 275 points Friday, its worst fall since November. It left the Dow down 0.8 percent for the year.

Economic data from Europe and Asia also came in weak, and traders sold all types of risky investments and stampeded toward the safety of U.S. government bonds. Bond prices rose sharply. And the yield on the 10-year U.S. Treasury note touched 1.44 percent, the lowest on record.

Those sinking bond yields will mean even lower mortgage rates. That’s because mortgage rates tend to track the yield on the 10-year Treasury note.

– Daniel Wagner, AP Business Writer

—

SOME BENEFITS FOR CONSUMERS

Gas is getting cheaper as demand slows globally. It’s dropped to $2.99 in some areas of South Carolina. It could soon fall below $3 in a handful of Southern states.

A plunge in oil prices has knocked more than 30 cents off the price of a gallon of gas in most parts of the U.S. since early April. The national average is now $3.61. Experts say it could drop to at least $3.40 before Labor Day.

As Americans spend less to fill their tanks, they’ll have more to spend on other purchases, from autos and furniture to appliances and vacations, which could help drive economic output and job growth.

– Sandy Shore, AP Business Writer

—

BACK IN THE HUNT: OLDER WORKERS

Last month, 642,000 people began looking for work. And nearly half were 55 or older.

Many have had no choice. Household wealth has shrunk as home equity and stocks prices have declined or languished. And many older people are helping struggling adult children.

Sara Rix, a policy analyst at the AARP’s Public Policy Institute, suggested that the decline in unemployment in previous months lifted people’s hopes about their job prospects. That’s why many started looking for work again.

– Christopher S. Rugaber, AP Economics Writer

—

A SOBERING TREND

That more people are looking for work should be good news. It suggests that Americans are increasingly optimistic about their job prospects.

But analysts cautioned that May’s influx was a small one that doesn’t alter the broader trend. Heidi Shierholz, an economist at the liberal Economic Policy Institute, estimates that sluggish hiring has discouraged 3.6 million people from looking for work since the recession began in December 2007.

Consider the labor force participation rate. It measures the proportion of people who are working or looking for work. It rose last month to 63.8 percent. That’s slightly better than April’s 63.6 percent – the lowest in more than 30 years.

Yet it’s still far below the 65.7 percent rate from June 2009, the final month of the recession.

—

DUELING POLITICAL VIEWS

Obama said the jobs report shows the U.S. economy is not creating jobs “as fast as we want” but that the economy will improve.

“We will come back stronger,” Obama said. “We do have better days ahead.”

His Republican challenger, Mitt Romney, countered: “Today’s weak jobs report is devastating news for American workers and American families. …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.”

– Jim Kuhnhenn, White House Correspondent

—

GOVERNMENT ISN’T HELPING

Government jobs cuts are worsening the employment picture. The federal government shed 5,000 jobs in May. State governments cut 5,000 and local governments 3,000.

Overall, governments have cut jobs in 10 of the past 12 months.

Tax collections by state and local governments have been rising since mid-2009. Yet governments have steadily reduced spending. From January through March, government cuts reduced U.S. economic growth by 0.78 percent point to an annual pace of just 1.9 percent.

– Paul Wiseman, AP Economics Writer

—

BIG CUTS IN CONSTRUCTION

Some major industries cut jobs sharply in May.

Construction firms cut 28,000 jobs. That was the sharpest such drop in two years.

Governments shed 13,000. A category of employers called “leisure and hospitality” cut nearly 9,000 positions, mostly because of jobs lost at amusement parks, museums and casinos.

Professional and business service firms, which include accountants, engineers and lawyers as well as temps and clerical staffers, dropped 1,000.

On a hopeful note, manufacturers added 12,000 jobs. Transportation and warehousing companies created nearly 36,000. And 46,000 jobs were added in education and health care. Hotels and restaurants added roughly 9,000 jobs.

– Christopher S. Rugaber, AP Economics Writer

—

CONSIDER THE ‘EMPLOYMENT’ RATE

To assess the job market, most people look at the unemployment rate. Since August, it’s dropped from 9.1 percent to 8.2 percent.

But the rate can be misleading. It doesn’t count people without jobs who aren’t looking for one.

That’s why the “employment rate” can be a more useful gauge. It measures the percentage of adults who do have jobs. And it’s painting a more sobering picture.

Since August, the employment rate has improved only slightly, from 58.3 percent to 58.6 percent. That’s lower than when the recession ended in June 2009, when it was 59.4 percent.

– Christopher S. Rugaber, AP Economics Writer

—

EUROPE STILL WORSE

As bad as the May employment numbers were, it’s a lot worse in Europe.

Unemployment in the 17 countries that use the euro currency hit 11 percent in April, the highest since the single currency was introduced in 1999, the European Union’s Eurostat office reported Friday.

“Europe would gladly trade places with the U.S.,” says Josh Feinman, global chief economist of DB Advisors.

But Europe’s problems are likely to pinch America too, by denting U.S. exports to Europe and rattling financial markets. And should the U.S. economy, the largest in the world, weaken further, that would further damage economies in Europe and Asia.

– Paul Wiseman, AP Economics Writer

—

COUCH-SURFING

The job market remains tough even for the educated or experienced. Erica Johnson, 33, calls herself a “couch-surfing Ph.D.” because she’s been sleeping on sofas in the homes of friends and relatives in Lexington, Ky. Armed with a doctorate in education policy, she’d like to work as a college administrator.

But most management jobs she’s pursued require more experience. Yet she’s considered overqualified for lower-level jobs.

“There aren’t a lot of midlevel openings,” Johnson said, after many states have cut education budgets. Phil Allen, 48, a veteran PR professional in suburban Chicago, says he’s had 70 job interviews in the past year. He gave a 20-minute presentation as part of an all-day interview for one opening this spring and left thinking, “There’s no way I’m not going to get this job.”

“But I didn’t get it,” he said. “That’s kind of a crushing thing.”

– Christopher S. Rugaber, AP Economics Writer

—

SLOW RECOVERY

Three years into the recovery, hiring remains weak by one key historical standard.

In February 1984, 15 months after the most recent severe recession had ended, the annual pace of hiring amounted to 6.5 percent of total U.S. employment.

Yet since the Great Recession officially ended in June 2009, job gains have been fitful. Hiring has only recently topped 2 percent of total payrolls.

What’s going on?

Mainly, the economy is too weak to drive more job growth. Consumers are still cautious about spending. And the housing sector is still weak. Both are weighing on the economy more than in previous recoveries.

– Christopher S. Rugaber, AP Economics Writer

A service of YellowBrix, Inc.

WASHINGTON – The American economy is in trouble again.

Employers in the United States added only 69,000 jobs in May, the fewest in a year and not even close to what economists expected. For the first time since last June, the unemployment rate rose, to 8.2 percent from 8.1 percent.

It was the third month in a row of weak job growth and further evidence that, just as in 2010 and 2011, a winter of hope for the economy has turned to a spring of disappointment.

“This is horrible,” said Ian Shepherdson, chief economist at High Frequency Economics, a consulting firm.

The job figures, released Friday morning by the Labor Department, dealt a strong blow to President Barack Obama at the start of a general election campaign that will turn on the economy.

They also deepened the pessimism of investors, who even before the report was released were worried about a debt crisis in Europe with no sign of solution and signs of a slowdown in the powerhouse economy of China.

The Dow Jones industrial average fell 275 points, its worst day of the year, and for the first time was down for 2012. The Standard & Poor’s 500 index is almost 10 percent below its 2012 high, the traditional definition of a market correction.

Mitt Romney, who on Tuesday cleared the number of convention delegates required to win the Republican presidential nomination, told CNBC that the report was “devastating.”

He called for an emphasis on energy development, pledged to “kill” the health care overhaul that Obama saw through in 2010 and said he would reduce taxes and government spending. The clearest fix for the economy, he said, was to defeat 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,” said Romney, the former Massachusetts governor.

Obama, in Minnesota, pushed a proposal to expand job opportunities for veterans returning from Iraq and Afghanistan. He said that the economy is not creating jobs “as fast as we want” but vowed that it would improve.

“We will come back stronger,” he said. “We do have better days ahead.”

Alan Krueger, head of the president’s Council of Economic Advisers, pointed out that the country has added jobs for 27 months in a row, including 4.3 million jobs in the private sector.

Underscoring the challenge for Obama with five months to go in the campaign, a May poll by The Associated Press and GfK, a research company, showed that 52 percent disapproved of Obama’s handling of the economy while 46 percent approved.

Some financial analysts said that the dismal job figures put pressure on the Federal Reserve to take additional steps to help the economy, but it was not clear how much good the Fed could do beyond trying to inspire confidence.

The central bank has already kept the short-term interest rate it controls at a record low of almost zero since the fall of 2008, during the financial crisis, and pledged to keep it there through late 2014.

It has undertaken two rounds of massive purchases of government bonds, starting in March 2009 and November 2010, to help drive long-term interest rates down and stimulate stock prices. Another program to lower long-term interest rates, known as Operation Twist, was announced last September and ends this month.

But low interest rates, other analysts pointed out, are not the problem. An investor stampede into bonds on Friday drove the yield on the 10-year U.S. Treasury note as low as 1.44 percent, the lowest on record.

Fed Chairman Ben Bernanke testifies next week before a joint committee of Congress, and the Fed next meets June 19 and 20.

Complicating the challenge for the economy, tax cuts passed under President George W. Bush will expire after Dec. 31, as will a cut in the Social Security payroll tax. More than $100 billion in automatic spending cuts to defense and domestic programs also kick in Jan. 1. Less money in consumers’ pockets next year and less spending by the government would be a significant drag on the economy.

Congress could extend the tax cuts, but Republicans control the House, and they and Obama disagree over whether to do so for all or for everyone but the wealthiest Americans.

The Congressional Budget Office has said the tax increases and spending cuts would cause the economy to shrink at an annual rate of 1.3 percent in the first half of next year. The economy grew at a 1.9 percent annual rate in the first quarter of this year.

And there is little significant action that the White House can take on its own.

The job figures in the United States added to evidence that the world economy is in peril again.

Spain insisted Friday that it is financially stable, but its borrowing costs are creeping close to the 7 percent level that forced Greece, Ireland and Portugal to seek international bailouts.

Europe has grappled for more than two years with the crippling debt owed by many of its countries, and leaders remain divided over how to solve it. Stronger countries like Germany have insisted on government spending cuts, but voters in weaker countries are in no mood for further fiscal pain. Unemployment in the 17 countries that use the euro currency is a record 11 percent.

And even fast-growing economies in the developing world appear to be slowing.

India reported Thursday that its economy grew just 5.3 percent in the January-March quarter, slowest in nine years. And manufacturing in China, the world’s second-largest economy after the United States, barely grew in May.

The U.S. government uses a survey of mostly large businesses and government agencies to determine how many jobs are added or lost each month. That is the survey that produced the 69,000 number.

It uses a separate survey of American households to calculate the unemployment rate. That survey picks up hiring by companies of all sizes, including small businesses, companies being started, farm workers and the self-employed.

The household survey found that 422,000 more Americans had jobs in May than in April. But the work force grew by 642,000 as more Americans who hadn’t been looking for work started to look. That is why the unemployment rate inched up from 8.1 percent to 8.2 percent.

The economy lost 28,000 construction jobs, the worst for that industry in two years, and 13,000 government jobs. A category of employers called “leisure and hospitality” cut almost 9,000, mostly at amusement parks, museums and casinos.

And March and April, already disappointing months for job creation, were not as strong as first thought. The government revised the job-growth totals lower by 11,000 to 143,000 for March and by 38,000 to 77,000 for April.

From December through February, the economy added an average 252,000 jobs per month.

“There is virtually nothing positive in this report if you are trying to build a case for an economy that is supposed to be in recovery mode and gaining momentum,” said Tom Porcelli, chief U.S. economist for RBC Capital Markets.

Investors made their disappointment clear.

The Dow, the S&P 500 and the Nasdaq composite index all fell by more than 2 percent. The S&P, which was up 12 percent for the year through March, was left with a slender gain of 1.6 percent.

Homebuilder stocks fell the most, apparently because the dismal picture for the U.S. economy outweighed a report that construction spending rose for a second month in April.

The price of gold, which some investors have often bought over the past three years for safety in turbulent economic times, climbed $58 an ounce, to $1,622, the highest since early May.

Anticipating weaker world demand, investors drove down the price of oil by $3.49 a barrel to $83.04, the lowest since October and 24 percent below its peak of $109.77 in February.

That will at least provide help for American drivers: The price of gasoline, which peaked at an average of $3.94 a gallon in April, has fallen to $3.61. It is below $3 in parts of South Carolina, and the national average should be below $3.50 soon.

Business owners cited a range of reasons for pulling back on hiring in May. Some said sales had been hurt by the weak economy in Europe. Others, like a California road construction company, said slower government spending was costing them.

But in interviews on Friday, most expressed general uncertainty about the U.S. economy.

Alan Gaynor’s architectural design firm in New York, Alan Gaynor & Co., isn’t hiring because his clients, real estate developers, are uneasy about starting projects.

“It’s a wait-and-see attitude they have. Everyone’s a little nervous. The economy’s growing a lot slower than anyone would have liked,” said Gaynor, who has 15 employees, the same as a year ago.

Still other businesses cited tight credit, a vestige of the 2008 financial crisis.

Robert Stewart Inc., a 93-year-old New Jersey company that makes neckties, wants to add five or six workers to its staff of 18, and business is up, said Steven Wishnew, the company’s operations director.

But the company can’t get the $50,000 to $100,000 in credit that would “kick-start our engine,” he said, and sellers that used to give them 90 days to pay now demand payment in advance.

The bank wants the company’s owners to put up their homes as collateral for a loan or line of credit, he said.

“You have to be insane to do that,” Wishnew said. “Who knows where this economy is going?”

—

AP Writers Martin Crutsinger, Christopher S. Rugaber, Liz Sidoti, Darlene Superville and Daniel Wagner in Washington and Jonathan Fahey and Joyce M. Rosenberg in New York contributed to this story.

(This version CORRECTS that Republicans and Obama disagree about whether to extend tax cuts for all or just wealthiest Americans, not that Republicans have no incentive to extend the cuts. )

A service of YellowBrix, Inc.

MINNEAPOLIS – President Barack Obama said Friday the latest employment report shows that the economy is not creating jobs “as fast as we want,” but he pledged that the economy will improve.

“We will come back stronger. We do have better days ahead,” Obama said at a Golden Valley, Minn., Honeywell plant where the company has taken steps to hire veterans returning from Iraq and Afghanistan.

The president was responding to the government’s jobs report for May, which showed that only 69,000 jobs were added during the month. That was the fewest in a year, as the unemployment rate increased to 8.2 percent from 8.1 percent in April.

Obama, in a tight re-election campaign against Republican Mitt Romney, said the economy still faces a number of challenges, including Europe’s debt crisis and higher gas prices, which have hurt families.

“The economy still isn’t where it needs to be,” Obama said.

Romney told CNBC that Obama’s economic policies had not worked and the new report was a “harsh indictment” of how the Democrat incumbent has steered the economy.

Obama later told donors at a Minneapolis fundraiser that the last four years had been “as tough a period in our country’s history as anything in our lifetimes, certainly since the 1930s.” He said his administration had tried to make “dogged progress” but acknowledged “we’re not out of the woods yet.”

He said Republicans had been driven in part by a focus to “beat Obama” and he hoped winning a second term would change that mentality.

“My hope, my expectation is that after the election, now that it turns out the goal of beating Obama doesn’t make much sense because I’m not running again, that we can start getting some cooperation again,” Obama said.

Obama told workers at the Honeywell plant that Congress could still take steps to help jumpstart the economy. While acknowledging the political realities of an election year, he said the November election was no reason for inaction in Washington.

“There’s no excuse for it, not when there are so many people out there looking for work,” he said.

He cited providing more money for states and local governments to help avert layoffs of teachers and first responder layoffs, saying the dollars could “serve as a buffer in case the situation in Europe gets any worse.”

Obama wants Congress to support incentives to hire veterans as police officers and firefighters. He also was taking action to help service members with manufacturing and high-demand skills receive civilian credentials and licenses.

The veterans “job corps” is part of Obama’s to-do list to spur job creation. It features a number of economic initiatives he has pushed before to help manufacturers, homeowners and veterans.

Obama was holding three fundraisers at a Minneapolis restaurant owned by the sons of Democratic Gov. Mark Dayton. Later in the day, he was headed to his hometown of Chicago, where he was holding three more fundraisers and staying overnight in his own home.

The events were supporting the Obama Victory Fund, a joint fundraising committee of Obama’s campaign, the Democratic National Committee and several state Democratic parties.

A service of YellowBrix, Inc.

WASHINGTON – The U.S. economy suddenly looks a lot weaker.

Only 69,000 jobs were added in May, the fewest in a year, and the unemployment rate rose from 8.1 percent to 8.2 percent.

The dismal jobs data will heighten fears that the economy is sputtering. It also puts President Barack Obama on the defensive five months before his re-election bid.

The Labor Department also said Friday that the economy added far fewer jobs in the previous two months than first thought – 11,000 fewer in March and 38,000 fewer in April. And the increase in unemployment was the first in 11 months.

Job creation is the fuel for the nation’s economic growth. When more people have jobs, more consumers have money to spend – and consumer spending drives about 70 of the economy.

—

Here’s what The Associated Press’ reporters are finding:

—

POLITICAL GRIDLOCK

Democrats and Republicans talk a lot about job creation. But a sharply divided Congress could end up being a job killer. Unless lawmakers intervene by the end of the year, income tax cuts will expire and $100 billion in spending cuts will kick in.

The Congressional Budget Office estimates that would cause the economy to shrink in the first half of 2013. That would meet the traditional definition of a recession: when the economy shrinks for two consecutive quarters.

The conventional wisdom is that at the last minute, lawmakers will prevent the country from falling off the so-called fiscal cliff. But until they do, economists say many businesses will remain reluctant to hire.

—

RECESSION RISK?

The jobs report led some economists to lower their growth forecasts for this year. Yet few foresee a drop back into another recession.

Mark Vitner, an economist at Wells Fargo Securities, said the economy remains stronger than it was in August, when a downgrade of the United States’ long-term credit rating led some analysts to warn that another recession could occur.

“The odds of recession today are considerably less than they were last August,” Vitner said. “More states are seeing improvement and more industries are recovering that at any time since the recession ended.”

Brian Bethune, an economics professor at Gordon College in Massachusetts, says either of two events would make a recession more likely: If the 17 nations that use the euro were to end their currency alliance. Or if Congress failed to reach a compromise to extend income tax cuts set to expire at year’s end and avoid across-the-board government spending cuts .

– Christopher S. Rugaber, AP Economics Writer

—

A PENNY HERE, A PENNY THERE

A slowdown in hiring hurts even those who do have jobs because employers have less incentive to give raises.

That trend continued in May. The average hourly wage rose just two pennies, to $23.41.

Pay has risen 1.7 percent in the past year. That’s the smaller 12-month gain since December 2010. It’s even slower than the rate of inflation, which means many people can afford less on what they are earning.

– Christopher S. Rugaber, AP Economics Writer

—

JOBS LOST TO AUTOMATION

“We’re not hiring, and we’re not replacing” workers who leave, said Joe Glenn, who runs Glenn Metalcraft in Princeton, Minn.

Not because business isn’t good. Sales jumped 40 percent last year. But over the past five years, his shop has kept employment flat at about 35 workers. Instead, he’s added more computer-controlled metalworking machines and robots to load the raw material into them.

His shop is so busy that he runs an overnight shift to keep the machines running, making parts for trailers that haul sand to oil fields in North Dakota and parts for farm and construction equipment. But he needs fewer workers to make those parts.

“I think we’re producing as much as we were with a lot less manpower, and I don’t foresee that those jobs are going to come back,” Glenn said.

– Joshua Freed, AP Business Writer

—

PAIN ON WALL STREET

The jobs report spread gloom among investors. The Dow Jones industrial average shed about 275 points Friday, its worst fall since November. It left the Dow down 0.8 percent for the year.

Economic data from Europe and Asia also came in weak, and traders sold all types of risky investments and stampeded toward the safety of U.S. government bonds. Bond prices rose sharply. And the yield on the 10-year U.S. Treasury note touched 1.44 percent, the lowest on record.

Those sinking bond yields will mean even lower mortgage rates. That’s because mortgage rates tend to track the yield on the 10-year Treasury note.

– Daniel Wagner, AP Business Writer

—

SOME BENEFITS FOR CONSUMERS

Gas is getting cheaper as demand slows globally. It’s dropped to $2.99 in some areas of South Carolina. It could soon fall below $3 in a handful of Southern states.

A plunge in oil prices has knocked more than 30 cents off the price of a gallon of gas in most parts of the U.S. since early April. The national average is now $3.61. Experts say it could drop to at least $3.40 before Labor Day.

As Americans spend less to fill their tanks, they’ll have more to spend on other purchases, from autos and furniture to appliances and vacations, which could help drive economic output and job growth.

– Sandy Shore, AP Business Writer

—

BACK IN THE HUNT: OLDER WORKERS

Last month, 642,000 people began looking for work. And nearly half were 55 or older.

Many have had no choice. Household wealth has shrunk as home equity and stocks prices have declined or languished. And many older people are helping struggling adult children.

Sara Rix, a policy analyst at the AARP’s Public Policy Institute, suggested that the decline in unemployment in previous months lifted people’s hopes about their job prospects. That’s why many started looking for work again.

– Christopher S. Rugaber, AP Economics Writer

—

A SOBERING TREND

That more people are looking for work should be good news. It suggests that Americans are increasingly optimistic about their job prospects.

But analysts cautioned that May’s influx was a small one that doesn’t alter the broader trend. Heidi Shierholz, an economist at the liberal Economic Policy Institute, estimates that sluggish hiring has discouraged 3.6 million people from looking for work since the recession began in December 2007.

Consider the labor force participation rate. It measures the proportion of people who are working or looking for work. It rose last month to 63.8 percent. That’s slightly better than April’s 63.6 percent – the lowest in more than 30 years.

Yet it’s still far below the 65.7 percent rate from June 2009, the final month of the recession.

—

DUELING POLITICAL VIEWS

Obama said the jobs report shows the U.S. economy is not creating jobs “as fast as we want” but that the economy will improve.

“We will come back stronger,” Obama said. “We do have better days ahead.”

His Republican challenger, Mitt Romney, countered: “Today’s weak jobs report is devastating news for American workers and American families. …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.”

– Jim Kuhnhenn, White House Correspondent

—

GOVERNMENT ISN’T HELPING

Government jobs cuts are worsening the employment picture. The federal government shed 5,000 jobs in May. State governments cut 5,000 and local governments 3,000.

Overall, governments have cut jobs in 10 of the past 12 months.

Tax collections by state and local governments have been rising since mid-2009. Yet governments have steadily reduced spending. From January through March, government cuts reduced U.S. economic growth by 0.78 percent point to an annual pace of just 1.9 percent.

– Paul Wiseman, AP Economics Writer

—

BIG CUTS IN CONSTRUCTION

Some major industries cut jobs sharply in May.

Construction firms cut 28,000 jobs. That was the sharpest such drop in two years.

Governments shed 13,000. A category of employers called “leisure and hospitality” cut nearly 9,000 positions, mostly because of jobs lost at amusement parks, museums and casinos.

Professional and business service firms, which include accountants, engineers and lawyers as well as temps and clerical staffers, dropped 1,000.

On a hopeful note, manufacturers added 12,000 jobs. Transportation and warehousing companies created nearly 36,000. And 46,000 jobs were added in education and health care. Hotels and restaurants added roughly 9,000 jobs.

– Christopher S. Rugaber, AP Economics Writer

—

CONSIDER THE ‘EMPLOYMENT’ RATE

To assess the job market, most people look at the unemployment rate. Since August, it’s dropped from 9.1 percent to 8.2 percent.

But the rate can be misleading. It doesn’t count people without jobs who aren’t looking for one.

That’s why the “employment rate” can be a more useful gauge. It measures the percentage of adults who do have jobs. And it’s painting a more sobering picture.

Since August, the employment rate has improved only slightly, from 58.3 percent to 58.6 percent. That’s lower than when the recession ended in June 2009, when it was 59.4 percent.

– Christopher S. Rugaber, AP Economics Writer

—

EUROPE STILL WORSE

As bad as the May employment numbers were, it’s a lot worse in Europe.

Unemployment in the 17 countries that use the euro currency hit 11 percent in April, the highest since the single currency was introduced in 1999, the European Union’s Eurostat office reported Friday.

“Europe would gladly trade places with the U.S.,” says Josh Feinman, global chief economist of DB Advisors.

But Europe’s problems are likely to pinch America too, by denting U.S. exports to Europe and rattling financial markets. And should the U.S. economy, the largest in the world, weaken further, that would further damage economies in Europe and Asia.

– Paul Wiseman, AP Economics Writer

—

COUCH-SURFING

The job market remains tough even for the educated or experienced. Erica Johnson, 33, calls herself a “couch-surfing Ph.D.” because she’s been sleeping on sofas in the homes of friends and relatives in Lexington, Ky. Armed with a doctorate in education policy, she’d like to work as a college administrator.

But most management jobs she’s pursued require more experience. Yet she’s considered overqualified for lower-level jobs.

“There aren’t a lot of midlevel openings,” Johnson said, after many states have cut education budgets. Phil Allen, 48, a veteran PR professional in suburban Chicago, says he’s had 70 job interviews in the past year. He gave a 20-minute presentation as part of an all-day interview for one opening this spring and left thinking, “There’s no way I’m not going to get this job.”

“But I didn’t get it,” he said. “That’s kind of a crushing thing.”

– Christopher S. Rugaber, AP Economics Writer

—

SLOW RECOVERY

Three years into the recovery, hiring remains weak by one key historical standard.

In February 1984, 15 months after the most recent severe recession had ended, the annual pace of hiring amounted to 6.5 percent of total U.S. employment.

Yet since the Great Recession officially ended in June 2009, job gains have been fitful. Hiring has only recently topped 2 percent of total payrolls.

What’s going on?

Mainly, the economy is too weak to drive more job growth. Consumers are still cautious about spending. And the housing sector is still weak. Both are weighing on the economy more than in previous recoveries.

– Christopher S. Rugaber, AP Economics Writer

A service of YellowBrix, Inc.

WASHINGTON – The U.S. economy suddenly looks a lot weaker.

Only 69,000 jobs were added in May, the fewest in a year, and the unemployment rate rose from 8.1 percent to 8.2 percent.

The dismal jobs data will heighten fears that the economy is sputtering. It also puts President Barack Obama on the defensive five months before his re-election bid. And it could lead the Federal Reserve to take further steps to help the economy.

The Labor Department also said Friday that the economy added far fewer jobs in the previous two months than first thought – 11,000 fewer in March and 38,000 fewer in April. And the increase in unemployment was the first in 11 months.

Job creation is the fuel for the nation’s economic growth. When more people have jobs, more consumers have money to spend – and consumer spending drives about 70 of the economy.

—

Here’s what The Associated Press’ reporters are finding:

—

WHY ONE EMPLOYER ISN’T HIRING

When Michael Eberstadt opened his New York City soul food restaurant in 2007, he had a staff of about 25.

“That was right before the world ended,” said Eberstadt, owner of Rack & Soul, referring to the recession that began in December that year. He’s since shrunk his staff to about 15.

“Hiring is really a function of demand,” he said. “Unfortunately, if the demand isn’t there, then you don’t need to hire.”

Eberstadt said his restaurant was “hit hard and never really recovered” from the recession. Last year, the top 500 restaurant chains reported sales growth of just 3.5 percent, according to the food industry researcher Technomic Inc.

Still, Eberstadt is relieved he hasn’t had to lay anybody off recently. His payroll has held steady for the past year.

– Candice Choi, AP Business Writer

—

SEEKING SOLUTIONS

What can be done to energize U.S. hiring?

Sung Won Sohn, an economics professor at California State University, said Congress and the Obama administration must work immediately to address the “fiscal cliff” looming at year’s end. That’s when the economy will be hit with higher taxes and across-the-board government spending unless Democrats and Republicans forge some compromise.

Uncertainty over what will be done about the fiscal cliff will likely hang over the U.S. economy for months.

“Businesses have pulled in their horns, given the growing amount of uncertainty,” Sohn said.

He said Federal Reserve Chairman Ben Bernanke could also start discussing another round of Fed bond buying to try to further lower long-term interest rates.

Sohn noted that more bond buying remains unlikely given how low rates are already. Still, he said, “just the fact that Bernanke is talking about more Fed bond buying would be important. What we need is a psychological lift.”

– Martin Crutsinger, AP Economics Writer

—

PREDICTING MORE FED ACTION

“This clearly puts the Fed back in play for a near-term easing operation,” says Jay Feldman, director of U.S. economics for Credit Suisse.

Feldman expects the Fed to act at its next meeting June 19-20 – perhaps by buying mortgage-backed investments to try to push down long-term mortgage rates or by doing something unexpected.

That said, mortgage rates are already hitting bottom. The average rate on the 30-year fixed-rate mortgage fell this week to 3.75 percent. That’s the lowest since long-term mortgages began in the 1950s.

– Paul Wiseman, AP Economics Writer

—

PAIN ON WALL STREET

Stocks sank after the release of the jobs report. The Dow Jones industrial average dropped more than 200 points, erasing what was left of its gain for the year and putting the index on track for its worst one-day drop since November.

Economic data from Europe and Asia also came in weak, and traders sold all types of risky investments and stampeded toward the safety of U.S. government bonds. Bond prices rose sharply. And the yield on the 10-year U.S. Treasury note touched 1.44 percent, the lowest on record.

– Daniel Wagner, AP Business Writer

—

BACK IN THE HUNT: OLDER WORKERS

Last month, 642,000 people began looking for work. And nearly half were 55 or older.

Many have had no choice. Household wealth has shrunk as home equity and stocks prices have declined or languished. And many older people are helping struggling adult children.

Sara Rix, a policy analyst at the AARP’s Public Policy Institute, suggested that last month’s influx of older workers shows many had become more hopeful about their job prospects after hiring strengthened early this year.

The decline in the unemployment rate in previous months likely “made people more optimistic,” Rix said.

– Christopher S. Rugaber, AP Economics Writer

—

A SOBERING TREND

That more people are looking for work should be good news. It suggests that Americans are increasingly optimistic about their job prospects.

But analysts cautioned that May’s influx was a small one that doesn’t alter the broader trend. Heidi Shierholz, an economist at the liberal Economic Policy Institute, estimates that sluggish hiring has discouraged 3.6 million people from looking for work since the recession began in December 2007.

Consider the labor force participation rate. It measures the proportion of people who are working or looking for work. It ticked up last month to 63.8 percent. That’s slightly better than April’s 63.6 percent – the lowest in more than 30 years.

Yet it’s still far below the 65.7 percent rate from June 2009, the final month of the recession.

—

DUELING POLITICAL VIEWS

White House economist Alan Krueger said that while the latest jobs report illustrated the need for faster growth, the administration welcomes any increase in jobs.

“We are on a better path then we had been before the president came into office,” he said.

Obama’s Republican challenger, Mitt Romney countered: “Today’s weak jobs report is devastating news for American workers and American families. …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.”

– Darlene Superville, Associated Press Writer

—

GOVERNMENT ISN’T HELPING

Government jobs cuts are worsening the jobs picture. The federal government shed 5,000 jobs in May. State governments cut 5,000 and local governments 3,000.

Overall, governments have cut jobs in 10 of the past 12 months.

Tax collections by state and local governments have been rising since mid-2009. Yet the belt-tightening continues. From January through March, government cuts reduced U.S. economic growth by 0.78 percent point to an annual pace of just 1.9 percent.

“Typically, the government offers a base level of support” when the economy is weak, says Scott Brown, chief economist at Raymond James & Associates.

“In this case, the government is actually contributing to the weakness of the recovery. … You’re talking about teachers getting laid off. Government worker have families. They have mortgages. They spent their paychecks.”

– Paul Wiseman, AP Economics Writer

—

BIG CUTS IN CONSTRUCTION

Some major industries absorbed steep job losses in May.

Construction firms cut 28,000 jobs. That was the sharpest such drop in two years.

Governments shed 13,000. Amusement parks, museums and casinos cut nearly 17,000 positions. Professional and business service firms, which include high-paying positions in accounting, engineering and legal services, dropped 1,000.

On a hopeful note, a few key industries created jobs. Manufacturers added 12,000. Transportation and warehousing companies created nearly 36,000. And 46,000 jobs were added in education and health care. Hotels and restaurants added roughly 9,000 jobs.

– Christopher S. Rugaber, AP Economics Writer

—

CONSIDER THE `EMPLOYMENT RATE’

To assess the job market, most people look at the unemployment rate. But it can be misleading. The rate can fall, for example, even if hiring is weak.

This can happen when many people stop looking for work and are no longer counted as unemployed. The rate can also rise even when jobs are created, if more people start looking. The number of unemployed often rises. That’s what happened in May.

Then there’s the “employment rate.” It measures the percentage of adults who do have jobs. And it’s painting a more sobering picture.

Consider: The unemployment rate has dropped almost a full percentage point from August, from 9.1 percent to 8.2 percent. That might suggest the job market is steadily strengthening. Yet the employment rate has improved only slightly in that time, from 58.3 percent to 58.6 percent. That’s lower than when the recession ended, when it was 59.4 percent.

So why the difference? The economy has added jobs since August – but only about enough to keep up with population growth and prevent the unemployment rate from heading up.

– Christopher S. Rugaber, AP Economics Writer

—

EUROPE STILL WORSE

As bad as the May employment numbers were, Americans can take solace from one thing: It’s a lot worse in Europe.

Unemployment in the 17 countries that use the euro currency hit 11 percent in April, the highest since the single currency was introduced in 1999, the European Union’s Eurostat office reported Friday.

“Europe would gladly trade places with the U.S.,” says Josh Feinman, global chief economist of DB Advisors.

But Europe’s problems are likely to pinch America too, by denting U.S. exports to Europe and rattling financial markets. And should the U.S. economy, the largest in the world, weaken further, that would further damage economies in Europe and Asia.

– Paul Wiseman, AP Economics Writer

—

COUCH-SURFING

The job market remains tough even for the very educated or very experienced. Erica Johnson, 33, calls herself a “couch-surfing Ph.D.” because she’s been sleeping on sofas in the homes of friends and relatives in Lexington, Ky. Armed with a doctorate in education policy, she’d like to work as a college administrator.

But most management jobs she’s pursued require more experience. Yet she’s considered over-qualified for lower-level jobs.

“There aren’t a lot of mid-level openings,” Johnson said, after many states have cut education budgets.

Phil Allen, 48, a PR professional in suburban Chicago, says he’s had 70 job interviews in the past year. He gave a 20-minute presentation as part of an all-day interview for one opening this spring and left thinking, “There’s no way I’m not going to get this job.”

“But I didn’t get it,” he said. “That’s kind of a crushing thing.”

– Christopher S. Rugaber, AP Economics Writer

—

SLOW RECOVERY

Nearly three years into the recovery, hiring remains weak by every historical standard.

Consider what happened when companies slashed jobs in the 1981-82 recession. In September 1982, layoffs ran at an annual rate topping 4 percent. But the economy rebounded explosively. And job growth followed. By February 1984, 15 months after the recession had ended, hiring was occurring at a 6.5 percent annual pace.

During the Great Recession, job cuts were even steeper. They occurred at a 6 percent to 7 percent annual rate in the winter of 2008-09. Yet since the recession officially ended in June 2009, job gains have been fitful. Hiring has only recently topped 2 percent of total payrolls – just one-third the pace after the 1981-82 recession.

What’s going on this time?

Mainly, the economy is too weak to drive more job growth. Consumers are still cautious about spending. And the housing sector is still weak. Both are weighing on the economy more than in previous recoveries.

– Christopher S. Rugaber, AP Economics Writer

A service of YellowBrix, Inc.

Even the doubling of the S&P 500 (GSPC) from its March 2009 lows failed to stop the outflows from equity funds. Many investors simply didn’t trust the rally and confidence was further damaged by the ‘flash crash’ of May 2010.

Now comes the disastrous Facebook IPO (FB), which more than a few pundits believe has crushed any hope of getting retail investors excited about stocks again.

“Say goodbye to the individual investor on Wall Street,” HDNet chairman (and Dallas Mavs owners)Mark Cuban wrote on his blog in the wake of Facebook’s IPO. “Whatever positive impression they had of the IPO market and the stock market in general was just torched to the ground.”

Mike Santoli, senior editor of Barron’s, recently addressed chatter about the “death of equities” – an allusion to the famous 1979 Business Week cover — and comes to a very different conclusion.

Even if wildly successful, Santoli doesn’t believe Facebook’s IPO would have reignited retail interest in stocks. Instead, the botched IPO and grim aftermarket performance mainly served to reinforce investors’ preexisting skepticism, Santoli says. “It was another excuse to stay away if you were already were away.”

Some bulls see retail investors’ distaste for stocks as a great contrarian indicator, but Santoli notes the great bull market of the 1980s-1990s didn’t start until three years after Business Week’s “death of equities” cover and that retail investors were consistent sellers during the big rally off the March 2009 lows.

“If there is a ‘death of equities’, it’s very slow in coming,” he says.

As was the case in the 1950s, Santoli believes the stock market is back to a “professionals market,” which isn’t necessarily a bad thing. “Better to see that than people overexcited and thinking Wall Street was invented to get them rich,” as was the case in the late 1990s.

With stocks tumbling Friday morning and year-to-date gains being wiped out, there’s little risk of that happening anytime soon.

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com

I’ve built my career as a start-up entrepreneur. So far over my lifetime I’ve created seven business enterprises, some that I’ve sold for millions, and a few that didn’t. One thing that I learned from my ups and downs is that my most solid success came when I used a mantra that I adopted when I was a kid living in poverty. The mantra is—nothing to lose.

When I was a kid, the neighborhood where I lived was run by gangs. In this environment we struggled for dominance and survival; we faced cops, rival gangs, prison…but the thing we used to worry the most about were guys who acted like they had nothing to lose.

I saw nothing to lose as an invincible power. The trump card. When I got older, I recognized the business world as a similar competitive environment, and when I applied this mantra and carried it as a mentality from start-up to exit, I would always win. I even wrote a New York Times bestseller about it.

Ironically, in my position today, playing like I have nothing to lose is dangerous. My company has thousands of people that depend on it for their incomes. That’s a lot to lose. Steve Jobs was noted for saying that sometimes you have to “bet the company” or, in other words, play like you have nothing to lose. And I agree, as long as you keep in mind that you had better bet smart, and bet correctly.

I’ve been on all sides of the deal, from raising seed venture capital to my current role as CEO of a division of a public company that did $96M in revenue in the 4th quarter of last year. I know very well the decision making, and risks and rewards associated with going from having nothing to lose, to everything to lose. Let’s start with the decision-making first. Here are some insights on what I like to call the NTL vs. ETC (nothing to lose vs. everything to lose) decision tree.

• First I ask myself, “is this a ‘bet the company decision?”

Often you don’t realize the decision you’re trying to make is a ‘bet the company decision.’ So I use a simple trick to determine the potential cost of a decision: I price tag it. This is easy if I’m signing a $50 million dollar purchase order for inventory and the martial impact of making a bad inventory decision is self-explanatory, however sometimes your gut will say one thing and the people around you will say another.

This is where many entrepreneurs fail to act, or rather, to think. If you ask yourself the question—is this a bet the company decision—and the answer is yes, then stop the train and evaluate every detail no matter how mundane or routine the actual task is or how much the experts around you tell you it’s ‘no big deal.’

I’ve built my career as a start-up entrepreneur. So far over my lifetime I’ve created seven business enterprises, some that I’ve sold for millions, and a few that didn’t. One thing that I learned from my ups and downs is that my most solid success came when I used a mantra that I adopted when I was a kid living in poverty. The mantra is—nothing to lose.

When I was a kid, the neighborhood where I lived was run by gangs. In this environment we struggled for dominance and survival; we faced cops, rival gangs, prison…but the thing we used to worry the most about were guys who acted like they had nothing to lose.

I saw nothing to lose as an invincible power. The trump card. When I got older, I recognized the business world as a similar competitive environment, and when I applied this mantra and carried it as a mentality from start-up to exit, I would always win. I even wrote a New York Times bestseller about it.

Ironically, in my position today, playing like I have nothing to lose is dangerous. My company has thousands of people that depend on it for their incomes. That’s a lot to lose. Steve Jobs was noted for saying that sometimes you have to “bet the company” or, in other words, play like you have nothing to lose. And I agree, as long as you keep in mind that you had better bet smart, and bet correctly.

I’ve been on all sides of the deal, from raising seed venture capital to my current role as CEO of a division of a public company that did $96M in revenue in the 4th quarter of last year. I know very well the decision making, and risks and rewards associated with going from having nothing to lose, to everything to lose. Let’s start with the decision-making first. Here are some insights on what I like to call the NTL vs. ETC (nothing to lose vs. everything to lose) decision tree.

• First I ask myself, “is this a ‘bet the company decision?”

Often you don’t realize the decision you’re trying to make is a ‘bet the company decision.’ So I use a simple trick to determine the potential cost of a decision: I price tag it. This is easy if I’m signing a $50 million dollar purchase order for inventory and the martial impact of making a bad inventory decision is self-explanatory, however sometimes your gut will say one thing and the people around you will say another.

This is where many entrepreneurs fail to act, or rather, to think. If you ask yourself the question—is this a bet the company decision—and the answer is yes, then stop the train and evaluate every detail no matter how mundane or routine the actual task is or how much the experts around you tell you it’s ‘no big deal.’

Continue reading this article at Forbes.com after the break!

WASHINGTON – The U.S. economy suddenly looks a lot weaker.

U.S. employers created only 69,000 jobs in May, the fewest in a year, and the unemployment rate ticked up.

The dismal jobs data will fan fears that the economy is sputtering. It also puts President Barack Obama on the defensive five months before his re-election bid. And it could lead the Federal Reserve to take further steps to help the economy.

The Labor Department also said Friday that the economy created far fewer jobs in the previous two months than first thought. It revised those figures down to show 49,000 fewer jobs created. The unemployment rate rose to 8.2 percent from 8.1 percent in April, the first increase in 11 months.

Job creation is the fuel for the nation’s economic growth. When more people have jobs, more consumers have money to spend – and consumer spending drives about 70 of the economy.

—

Here’s what The Associated Press’ reporters are finding:

—

SEEKING SOLUTIONS

What can be done to energize U.S. hiring?

Sung Won Sohn, an economics professor at California State University, said Congress and the Obama administration must work immediately to address the “fiscal cliff” looming at year’s end. That’s when the economy will be hit with higher taxes and across-the-board government spending unless Democrats and Republicans forge some compromise.

Uncertainty over what will be done about the fiscal cliff will likely hang over the U.S. economy for months.

“Businesses have pulled in their horns, given the growing amount of uncertainty,” Sohn said.

He said Federal Reserve Chairman Ben Bernanke could also start discussing another round of Fed bond buying to try to further lower long-term interest rates.

Sohn noted that more bond buying remains unlikely given how low rates are already. Still, he said, “just the fact that Bernanke is talking about more Fed bond buying would be important. What we need is a psychological lift.”

– Martin Crutsinger, AP Economics Writer

—

PREDICTING MORE FED ACTION

“This clearly puts the Fed back in play for a near-term easing operation,” says Jay Feldman, director of U.S. economics for Credit Suisse.

Feldman expects the Fed to act at its next meeting June 19-20 – perhaps by buying mortgage-backed investments to try to push down long-term mortgage rates or by doing something unexpected.

That said, mortgage rates are already hitting bottom. The average rate on the 30-year fixed-rate mortgage fell this week to 3.75 percent. That’s the lowest since long-term mortgages began in the 1950s.

– Paul Wiseman, AP Economics Writer

—

PAIN ON WALL STREET

Stocks sank after the release of the jobs report. The Dow Jones industrial average dropped more than 200 points, erasing what was left of its gain for the year and putting the index on track for its worst one-day drop since November.

Economic data from Europe and Asia also came in weak, and traders sold all types of risky investments and stampeded toward the safety of U.S. government bonds. Bond prices rose sharply. And the yield on the benchmark 10-year U.S. Treasury note touched 1.44 percent, the lowest on record.

– Daniel Wagner, AP Business Writer

—

DUELING POLITICAL VIEWS

White House economist Alan Krueger said that while the latest jobs report illustrated the need for faster growth, the administration welcomes any increase in jobs.

“We are on a better path then we had been before the president came into office,” he said.

Obama’s Republican challenger, Mitt Romney countered: “Today’s weak jobs report is devastating news for American workers and American families. …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.”

– Darlene Superville, Associated Press Writer

—

GOVERNMENT ISN’T HELPING

Government jobs cuts are worsening the jobs picture. The federal government shed 5,000 jobs in May. State governments cut 5,000 and local governments 3,000.

Overall, governments have cut jobs in 10 of the past 12 months.

Tax collections by state and local governments have been rising since mid-2009. Yet the belt-tightening continues. From January through March, government cuts reduced U.S. economic growth by 0.78 percent point to an annual pace of just 1.9 percent.

“Typically, the government offers a base level of support” when the economy is weak, says Scott Brown, chief economist at Raymond James & Associates.

“In this case, the government is actually contributing to the weakness of the recovery. … You’re talking about teachers getting laid off. Government worker have families. They have mortgages. They spent their paychecks.”

– Paul Wiseman, AP Economics Writer

—

BIG CUTS IN CONSTRUCTION

Some major industries absorbed steep job losses in May.

Construction firms cut 28,000 jobs. That was the sharpest such drop in two years.

Governments shed 13,000. Amusement parks, museums and casinos cut nearly 17,000 positions. Professional and business service firms, which include high-paying positions in accounting, engineering and legal services, dropped 1,000.

On a hopeful note, a few key industries created jobs. Manufacturers added 12,000. Transportation and warehousing companies created nearly 36,000. And 46,000 jobs were added in education and health care. Hotels and restaurants added roughly 9,000 jobs.

– Christopher S. Rugaber, AP Economics Writer

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CONSIDER THE `EMPLOYMENT RATE’

To assess the job market, most people look at the unemployment rate. But it can be misleading. The rate can fall, for example, even if hiring is weak.

This can happen when many people stop looking for work and are no longer counted as unemployed. The rate can also rise even when jobs are created, if more people start looking. The number of unemployed often rises. That’s what happened in May.

Then there’s the “employment rate.” It measures the percentage of adults who do have jobs. And it’s painting a more sobering picture.

Consider: The unemployment rate has dropped almost a full percentage point from August, from 9.1 percent to 8.2 percent. That might suggest the job market is steadily strengthening. Yet the employment rate has improved only slightly in that time, from 58.3 percent to 58.6 percent. That’s lower than when the recession ended, when it was 59.4 percent.

So why the difference? The economy has added jobs since August – but only about enough to keep up with population growth and prevent the unemployment rate from heading up.

– Christopher S. Rugaber, AP Economics Writer

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EUROPE STILL WORSE

As bad as the May employment numbers were, Americans can take solace from one thing: It’s a lot worse in Europe.

Unemployment in the 17 countries that use the euro currency hit 11 percent in April, the highest since the single currency was introduced in 1999, the European Union’s Eurostat office reported Friday.

“Europe would gladly trade places with the U.S.,” says Josh Feinman, global chief economist of DB Advisors.

But Europe’s problems are likely to pinch America too, by denting U.S. exports to Europe and rattling financial markets. And should the U.S. economy, the largest in the world, weaken further, that would further damage economies in Europe and Asia.

– Paul Wiseman, AP Economics Writer

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COAL WORKERS SQUEEZED

A warm winter that cut electricity demand and decade-low natural gas prices have led to tough times for the coal industry. Demand for coal in the U.S. is projected to drop to the lowest level since 1992 this year.

In response, coal companies are cutting back, especially in West Virginia and Kentucky, where relatively expensive coal is produced. Patriot Coal, based in St. Louis, has laid off 1,000 workers this year.

Alpha Natural Resources, based in Bristol, Va., announced in February it would idle four mines and lay off 320 workers. Earlier this month, it announced it would idle another mine and slow production at one more, cutting 133 more jobs.

– Jonathan Fahey, AP Energy Writer

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COUCH-SURFING

The job market remains tough even for the very educated or very experienced. Erica Johnson, 33, calls herself a “couch-surfing Ph.D.” because she’s been sleeping on sofas in the homes of friends and relatives in Lexington, Ky. Armed with a doctorate in education policy, she’d like to work as a college administrator.

But most management jobs she’s pursued require more experience. Yet she’s considered over-qualified for lower-level jobs.

“There aren’t a lot of mid-level openings,” Johnson said, after many states have cut education budgets.

Phil Allen, 48, a PR professional in suburban Chicago, says he’s had 70 job interviews in the past year. He gave a 20-minute presentation as part of an all-day interview for one opening this spring and left thinking, “There’s no way I’m not going to get this job.”

“But I didn’t get it,” he said. “That’s kind of a crushing thing.”

– Christopher S. Rugaber, AP Economics Writer

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SLOW RECOVERY

Nearly three years into the recovery, hiring remains weak by every historical standard.

Consider what happened when companies slashed jobs in the 1981-82 recession. In September 1982, layoffs ran at an annual rate topping 4 percent. But the economy rebounded explosively. And job growth followed. By February 1984, 15 months after the recession had ended, hiring was occurring at a 6.5 percent annual pace.

During the Great Recession, job cuts were even steeper. They occurred at a 6 percent to 7 percent annual rate in the winter of 2008-09. Yet since the recession officially ended in June 2009, job gains have been fitful. Hiring has only recently topped 2 percent of total payrolls – just one-third the pace after the 1981-82 recession.

What’s going on this time?

Mainly, the economy is too weak to drive more job growth. Consumers are still cautious about spending. And the housing sector is still weak. Both are weighing on the economy more than in previous recoveries.

– Christopher S. Rugaber, AP Economics Writer

A service of YellowBrix, Inc.

Income traders have gotten a big raise this month…

One of the world’s greatest income strategies is using the options market to collect “instant income” on high-quality stocks. You do that by selling naked putsand writing covered calls.

If you focus on the right setups, you can use this strategy to generate solid income (6%-12% yields) all year round. But sometimes it gets a heck of a lot more profitable…

That’s when the Volatility Index (or “VIX”) is elevated. The VIX measures the price people are willing to pay for “portfolio insurance” in the form of stock options. When the stock market gets shaky – as it has over the past two months – people are willing to pay a lot more for portfolio insurance.

That means people who are willing to sell options (income traders) get paid a lot more.

As you can see in the chart below, the “pay scale” has gotten a big boost. The VIX has broken out above the 20 level and is now trading about 30% higher than its average over the last five months.

You still need to be extremely picky about which stocks you use to generate income. But even on the world’s safest stocks, you can now earn an enormous annual yield…

For example, you can buy a big, cheap, safe stock like Microsoft, sell covered calls against it, and collect an income stream seven times as high as the annual dividend alone.

As our colleague Dan Ferris notes, Microsoft is a “World Dominating Dividend Grower.” If you take its tremendous cash hoard into account, you see it trades for less than seven times free cash flow. That’s incredibly cheap. Sure, Microsoft’s big growth days are behind it, but when you’re generating income with covered calls, you don’t need the stock to grow.

You see, when you sell covered calls, you collect cash upfront for agreeing to sell your shares for a higher price later. You give up some of your potential capital gains for guaranteed income and added safety. (You can read more about how the strategy works here.)

You should know: this strategy isn’t for gamblers reaching for the moon. This is for folks interested in a safe 10%-20% return in a year.

And you can do exactly that with Microsoft…

Right now, you can buy Microsoft for around $29 per share. You can then sell the July 30 calls for $0.75. That produces an instant “yield” of 2.6% ($0.75 divided by $29) and protects you down to $28.25 per share.

The calls expire in July, two months from now. Once they expire, you can do it all over again. So you can figure a rough annual return on this strategy of about 16%. Add in the annual 2.7% dividend, and your yield is over 18%.

The downside of a rising VIX, of course, is that the broad market is wobbling. But sticking with high-quality stocks like Microsoft will keep your capital safe… and allow you to “make hay” while the sun is shining on income traders.

 

Good trading,

Amber Lee Mason and Brian Hunt

P.S. “Trading for income” strategies are a cornerstone of our new DailyWealth Trader service. And we’ve created an exclusive video to show you the best ways to put them to work. It walks you step by step through our “greatest wealth secret.” You can view it free here.