Wall Street headed south Friday, as a weak report on unemployment prompted concerns of a fizzling economic recovery.
According to the Labor Department, U.S. employers added a mere 54,000 positions to their payrolls in May, helping push the national unemployment rate up to 9.1 percent.
To put the work force expansion -- or lack thereof -- in perspective: 54,000 net new jobs is the slowest pace of hiring in eight months, and it's down more than 75 percent from the previous three-month average of 220,000 jobs in EACH of the previous three months.
The figures on labor market growth were tempered by local governments which pared 28,000 jobs from their payrolls last month. Nearly 18,000 of those jobs were in education. All told, America's cities and counties have cut jobs for 22 consecutive months and have shed nearly 450,000 positions since September of 2008.
Private sector employers also were reluctant to expand their payrolls, hiring just 83,000 new workers in May - the fewest in nearly a year.
On Wall Street, stocks fell for the third consecutive day. And the Dow Jones Industrials settled Friday with an abbreviated trading week loss of nearly 300 points.
The anemic pace of job creation poses a challenge to President Obama in his bid for re-election next year. The Conference Board, a business research group, predicts that the unemployment rate will fall to 8.5 percent by the end of 2012. But, no president since FDR has won a second term in office when the nation's unemployment rate exceeded 7.2 percent on Election Day.
Yet there's little appetite on Capitol Hill for additional stimulus spending -- or any other spending for that matter... And this week, fiscal conservatives trained their sights on farm spending.
Deficit hawks in Washington have set their sights on farm subsidies yet again this week as a House panel voted to slash federal payments to the nation's wealthiest farmers.
On Tuesday, the House Appropriations Committee approved budget cuts of 13 percent for USDA and the Food and Drug Administration for the fiscal year starting October 1.
Under the house measure, farmers earning an adjusted gross income of $250,000 a year or less could still receive subsidies. Currently, federal payment recipients can make $500,000 in off-farm earnings and up to $750,000 in farm income. If enacted, the cuts could total billions in the coming budget year alone as everything from conservation programs to FDA inspections receive less government support. Subsidies to cotton farmers would be cut by nearly $150 million.
The move comes amidst a groundswell of public angst against government spending and tense negotiations between Congressional Republicans and the Obama Administration over a pending federal debt limit.
Cuts to federal farm payments long have been the goal of Arizona Representative Jeff Flake. The southwestern Republican has previously touted the Environmental Working Group's online subsidy database as proof of excessive federal payments.
After the House panel voice vote this week, Congressman Flake said:
"Nobody is willing publicly to defend this kind of largesse. It's gone on long enough."
But key agriculture groups have cried foul regarding the proposed spending cuts for everything from farm payments to international food aid. National Farmers Union President Roger Johnson blasted what he called "egregious" language in the House bill.
Johnson added: "Our economy, especially in rural areas, is on the edge of recovery. When funding is slashed for research, rural development, and renewable energy, we are taking our foot off of the accelerator and stepping on the brakes….In times of tight budgets, it is crucial that every dollar be used as effectively as possible."
Despite the anti-spending rhetoric from Main Street to Washington, new federal farm payment restrictions are far from certain. Various bipartisan proposals have collapsed at several stages of the legislative process under both the Bush and Obama Administrations.