The wheezing and slowing pace of US job creation in May cratered equity markets, pushing the Dow Jones industrial average into the red for 2012 and leaving job seekers blue.
In addition to being the fourth straight month of declining job growth, May also revealed:
* A slightly shorter work week, meaning employers have some wiggle room before they are forced to hire.
* The rate of underemployment — those working part time but wanting a full-time job — jumped higher.
* The number of long-term unemployed, those without a job for 27 weeks or longer, as a percentage of all jobless, increased to 42.8 percent from 41.3 percent.
“The big worry now is that this economic slowdown is widening and accelerating,” said stock strategist Sam Stovall at S&P Capital IQ.
The Dow skidded 274.88 to 12,118.57 in a broad rout, and has fallen 8.7 percent since May 1.
Investors scrambled here to the safety of US Treasury securities and gold — their old standbys in a financial crisis. Oil tanked by $3 a barrel here to $83.21, while gold zoomed $59 an ounce to $1,624.
Stocks across the board tumbled in a busy sell-off here that turned May into the worst month in two years for stocks.
The Standard & Poor’s 500 plunged 2.5 percent, leaving it clinging by a hair to a 1.6 percent gain for the year. The S&P lost 32.29 to 1,278.04.
Tech stocks suffered the steepest percentage loss, with the Nasdaq diving 2.8 percent to 2,747.48.
European markets extended their double-digit annual losses, with Spain the worst at a 32 percent loss for the year. Spain’s jobless rate is 25 percent.
The rise in bad economic news left US investors more confident that Federal Reserve Chairman Ben Bernanke would unveil innovative new stimulus tools to adjust the Fed’s balance sheet.
“This clearly puts the Fed back in play for a near-term easing operation,” said economist Jay Feldman at Credit Suisse. He expects it would be “an innovative or surprising form of expansion or adjustment to the Fed balance sheet.”
Another investment chief said a QE3 (Quantitative Easing) round is all but certain.
“To delay the pain, there can be little doubt that the Fed will unleash its next round of stimulus, in the form of QE3,” said Peter Schiff, CEO of Euro Pacific Capital.