Jobs: A bleak report, a bleaker outlook
The U.S. economy generated an anemic 54,000 jobs in May, raising worries that the recovery is fading, said Christopher Rugaber in the Associated Press. The unemployment rate rose from 9.0 percent to 9.1 percent, as many industries laid off workers and local budget cutbacks relegated 28,000 public workers to the unemployment rolls. Manufacturers eliminated 5,000 positions, the first net job loss in seven months in that sector, which had been leading the hiring comeback. Retailers, hotels, and restaurants also cut jobs, bringing a three-month hiring surge in those sectors to a dispiriting and abrupt halt.
Don’t try blaming tornadoes in the Midwest or supply-chain disruptions from Japan for the wretched payroll data, said Robin Harding in the Financial Times. “The slowdown in job growth was spread across many industries,” and suggests that U.S. economic activity remains so sluggish that employers are in no rush to add staff. In ordinary times, 9.1 percent unemployment would spur the Federal Reserve to lower short-term interest rates and the White House to announce measures to stimulate hiring. But short rates are already near zero, and Washington has no appetite for more spending. The unemployed are on their own.
Investigations: Goldman subpoenaed in crisis inquiry
Manhattan District Attorney Cyrus Vance Jr. has served Goldman Sachs with a broad subpoena for documents relating to the 2008 financial panic, said David Hilzenrath in The Washington Post, offering “a tangible sign that Wall Street’s role in the crisis remains under scrutiny.” Vance issued the subpoena following a Senate investigative report that accused Goldman of abusive behavior, including selling clients mortgage-backed securities without disclosing that they were designed to fail. Goldman is reportedly readying papers that it says would undermine the Senate report’s claim and any criminal indictment arising from the New York subpoenas.
Computers: Apple sticks its head in the cloud
Apple CEO Steve Jobs emerged from sick leave this week to unveil iCloud, a service that will allow owners of Apple hardware to store photos, music, videos, and books on Apple’s servers—the digital cloud—and retrieve them using any Apple device, said Miguel Helft in The New York Times. The free service will automatically sync all the content among any iPods, iPads, iPhones, and computers a user owns. A full version will ship in the autumn.
IPO: Groupon readies its public debut
Groupon, the website that sends its subscribers flocking to local merchants to score discounted deals, has filed paperwork for an initial public offering, said Boyan Josic in DailyDealMedia.com. Like many of the companies that went public during the late-1990s tech boom, Groupon has no profits, losing $114 million in the first three months of 2011. “At the same time, the company is generating some amazingly impressive revenues”—growing to $713.4 million in 2010 from $30.47 million in 2009, a growth rate of 2,241 percent.
Cybercrime: Chinese hackers target U.S. officials
Hundreds of Google Gmail accounts, including some belonging to senior U.S. officials and Chinese dissidents, were hacked in a coordinated campaign originating from China, said Mike Swift in the San Jose Mercury News. The attacks, which also targeted Asian military officials, were directed against personal accounts. The hackers sent some targets e-mails containing bits of information that made the messages appear to have come from close associates and had the targets download an attachment that activated spyware—a technique known as “spear phishing.”