Hiring in U.S. Slowed in May With 54,000 Jobs Added

The Labor Department reported on Friday that the nation added 54,000 nonfarm payroll jobs last month, after an increase of about 220,000 jobs in each of the three previous months. The gain in May was about a third of what economists had been forecasting. The unemployment rate, meanwhile, edged up to 9.1 percent from 9.0 percent in April.

“The economy clearly just hit a brick wall,” said Paul Ashworth, chief United States economist at Capital Economics. “It’s almost as if it came to a complete standstill.”

While most analysts do not believe that the country will slide back into a recession — which would technically mean that the economy would start shrinking again — they acknowledge that with such low levels of hiring, the recovery is barely perceptible to many Americans.

In Washington, today’s hiring challenges have been receiving less attention than tomorrow’s fiscal ones. But a week of dismal news on manufacturing, housing and car sales may shift the discussion. Some pressure is building on the Obama administration and Congress to delay federal spending cuts, which economists say will weigh down the fragile recovery. Liberal groups have renewed their calls for more aid to the states and more aggressive action from the Federal Reserve.

In some ways the moment is reminiscent of a year ago, when the economy also slowed abruptly just as it seemed to be gaining momentum. At the time, the slowdown was attributed to worries over the European debt crisis, just as Friday’s report was partly attributed to temporary stresses from higher energy prices and natural disasters. Last year’s downshift was followed by additional federal spending and another round of asset purchases by the Federal Reserve.

In remarks to Chrysler workers in Toledo, Ohio, President Obama conceded that the economy was still weak, and that policy makers had more work to do.

“Even though the economy is growing, even though it’s created more than two million jobs over the past 15 months, we still face some tough times,” he said. “You know, it’s just like if you had a bad illness, if you got hit by a truck, it’s going to take a while for you to mend.  And that’s what’s happened to our economy.  It’s taking a while to mend.”

Republicans,  meanwhile, countered that Democratic efforts to revive growth through public spending programs have failed and renewed their calls for sharp cuts in federal spending and regulation to spur corporate investment.

Though the White House cautioned against putting too much weight on one report, Friday’s release showed disturbing trends across the economy.

Job growth for April and March was revised downward. State and local governments, struggling with severe budget shortfalls, continued to shed jobs in May. They are expected to keep laying off workers for months to come.

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

One particularly unsettling note was the lack of a pickup in temporary help services. Temp hiring is considered a bellwether for broader hiring, since employers often try out temporary employees when considering whether to take on additional permanent staff. Employment in temporary help services was essentially unchanged in May and April.

Another leading indicator — the length of the workweek — was also disappointing. Usually businesses have existing employees work longer hours before hiring more workers. But the average did not budge in May.

Manufacturers delivered another blow by ending a six-month streak of job gains. They instead eliminated 5,000 jobs in May.

“They were our bright spot for so many months,” said Heather Boushey, a senior economist at the Center for American Progress, a liberal research organization. “They were what was pulling the economy forward.”

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Edwards Pleads Not Guilty in Campaign Fund Case

John Edwards with his daughter, Cate, outside the Federal Building in Winston-Salem, N.C. on Friday.

John Edwards, the former Democratic senator from North Carolina and nominee for vice president in 2004, was once one of his party’s most promising young stars. But on Friday he found himself in a stunning fall from grace — in a courtroom in North Carolina, being read his rights.

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John Edwards enters the Federal Building in downtown Winston-Salem, N.C. on Friday. A grand jury indicted the two-time presidential candidate, accusing him of trying to protect his political ambitions by soliciting and secretly spending more than $925,000 to hide his mistress and their baby from the public.

Earlier in the day, a federal grand jury indicted him on charges that he violated federal campaign finance laws by “secretly obtaining and using” contributions from wealthy benefactors to conceal his mistress and their baby while he was running for president in 2008.

He pleaded not guilty to the charges and set the stage for a trial that will most likely dredge up embarrassing details of his affair and his betrayal of his wife and those who believed in his campaign. But Mr. Edwards, a skilled trial lawyer, had rejected a chance to avoid a trial through a plea bargain, opting instead to take his chances in front of a jury.

“I will regret for the rest of my life the pain and the harm that I’ve caused to others,” Mr. Edwards told reporters outside the courthouse in Winston-Salem afterward. “But I did not break the law. And I never, ever thought that I was breaking the law.”

The trial was scheduled to begin July 11 in Winston-Salem, but lawyers involved said they expected it would start much later.

The grand jury, which has been investigating the case for two years, indicted Mr. Edwards on six counts — one involving conspiracy, four involving illegal payments and one involving false statements. If he is found guilty, Mr. Edwards, 57, faces a maximum penalty of 30 years in prison and $1.5 million in fines.

Mr. Edwards’s wife, Elizabeth, died of cancer in December. The couple had two young children and an older daughter, Cate, a lawyer, who accompanied Mr. Edwards to court. Mr. Edwards was released without having to post bail, but was ordered to turn in his passport and to avoid talking with potential witnesses.

The indictment contends that Mr. Edwards and his co-conspirators solicited $725,000 from Rachel Mellon, the 100-year-old heiress to the Mellon banking fortune, and $200,000 from Fred Baron, Mr. Edwards’s campaign finance chairman.

The money, the indictment said, was used to cover up his affair with Rielle Hunter, a campaign videographer with whom he had a child, and to pay for her prenatal medical expenses, travel and accommodations.

The fact that Mr. Edwards tried to cover up his affair is not at issue. The Justice Department says that those contributions from two wealthy patrons were campaign donations and therefore subject to federal campaign finance laws that set limits on the amounts that can be donated and received, and require public reporting. Those two donations were well in excess of the limit of $2,300 that an individual can give.

The indictment says the money was actually used for campaign purposes: If the public knew that he was having an affair, his campaign would have been over. (It was over anyway, before he confessed to the affair in August 2008, having lost too many primaries to the political superstars Barack Obama and Hillary Rodham Clinton, but it might have imploded even earlier, or never even gotten off the ground.)

“Mr. Edwards is alleged to have accepted more than $900,000 in an effort to conceal from the public facts that he believed would harm his candidacy,” Assistant Attorney General Lanny A. Breuer said in a statement. “As this indictment shows, we will not permit candidates for high office to abuse their special ability to access the coffers of their political supporters to circumvent our election laws.”

The Edwards defense is that the money was used not for political reasons but for personal reasons: he wanted to conceal the affair from his wife.

The Edwards legal team, headed by Gregory B. Craig, who defended President Bill Clinton during his impeachment proceedings, says the government is trying an untested theory and applying a too-broad definition of campaign contributions.

Robbie Brown reported from Winston-Salem, N.C.

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