The US economy only added a meagre 69,000 jobs in May, pushing the unemployment rate up to 8.2%, according to the US Labor Department.
The closely watched government labour figures were well below expectations of a 150,000 jobs increase and for the jobless rate to hold steady at 8.1% from April.
The Labor Department also slashed its estimate of April job gains by 33% to 77,000.
The data showed a nascent recovery in the job market had stalled. In the first quarter, the average job gain was 226,000. In April and May, the average fell to 73,000.
The number of people unemployed rose to 12.7 million, up from 12.5 million in April.
The euro dropped under $1.23 following the data release.
US consumers stayed cautious in April
US consumers continued to cautiously eat into their savings in April as household spending grew faster than incomes, newly released data showed today.
The difference was slight but significant, as price increases slowed to their lowest pace so far this year. Commerce Department figures showed that personal incomes grew 0.2% in April from the previous month, up $31.7 billion.
Consumer spending rose 0.3%, or $31.8 billion, during the same time.
The data suggested that consumers remained deeply cautious about the slow growth and still-high level of unemployment in the economy, forced to tap into more of their savings to a limited extent.
Price increases slowed in the same month: the personal consumption expenditures (PCE) price index rose by 1.8% year-on-year, by 1.9% if often volatile food and energy prices are excluded.
