Employment Situation Mimics Prior Years and Could Delay Recovery

Following dismal reports on employment, it might be time to give pause to the assumption that a housing recovery is here or soon to arrive. The ""Bureau of Labor"":http://www.bls.gov/ statistics reported Friday that only 69,000 jobs were added in May, the slowest growth seen in a year. Also, April was revised down to 77,000 jobs from the originally reported 115,000 added jobs. Unemployment crept up as well from 8.1 percent to 8.2.

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For Doug Duncan, chief economist for ""Fannie Mae"":http://www.fanniemae.com/portal/index.html, the narrative the economy is currently following is all too familiar.

""The recent trend is reminiscent of the monthly patterns of the spring slowdown witnessed over the last two years that continued through the summer months. If this pattern recurs, we expect that hopes for a meaningful housing recovery will be delayed once again,"" said Duncan.

Nigel Gault, chief U.S. economist for ""IHS Global Insight"":http://www.ihs.com/products/global-insight/index.aspx, also had a similar feeling of déjà vu, and said this year ""is beginning to look horribly like 2011 â€" initial high hopes that the recovery was kicking into high gear, subsequently dashed.""

Gault shed some light on the unemployment rate, and explained that the return of 642,000 to the labor force drove up the unemployment rate up to 8.2 percent.

Even though gasoline prices have dampened, Gault said, ""uncertainties over the Eurozone crisis, emerging market growth, the US elections and the ‘fiscal cliff''' are all reasons for hesitation from businesses to start hiring.

With this, the IHS economist said they expect the Fed to continue with pumping economic stimulus in some form in the second half of the year.