Friday’s jobs report was the most important in a while – and it was terrible. 
 
 DAVID LEONHARDT Follow David Leonhardt on Twitter at @DLeonhardt. When the jobs market weakened in March and April, economists could tell a sensible story about why the weakening wasn’t as severe as it looked. The unusually warm weather had caused people to spend more money than they had planned, pulling forward economic activity – and hiring – into late 2011 and early 2012. The slowdown in March and April seemed as if it might simply be payback, rather than a truly worrisome new trend. 
 
 But you can’t tell that story anymore. Some combination of problems – Europe’s new troubles, the rise in gas prices from several months ago, the continued cuts in government employment, the continued hangover from the financial crisis – has clearly slowed the economy. You can look at either survey that the Labor Department does, of businesses or households, and you can look at any time period. The message is the same. 
 
 For the third straight year, the economy has fallen into a spring slump. 
 
 Over the last three months, the economy has added an average of only 96,000 jobs a month, down from a three-month average of 252,000 in February. The growth of the last three months is the weakest since August. It’s weaker than the three-month growth in most of 2011 and half of 2010. 
 
 Job growth in the private sector has slowed, while the federal government and local governments are cutting workers. (State governments are no longer cutting, but they are not adding many, either.) 
 
 What happens now? Don’t expect much action from Congress, despite the talk you will hear on Friday. The jobs numbers will certainly raise the odds of further action by the Federal Reserve, but it’s not clear by how much. Perhaps most important, the decisions of European policy makers loom even larger now. ||||| The economy gained just 69,000 jobs in May, way down from economists’ expectations of 150,000 or more, ticking the unemployment rate up to 8.2 percent, the Bureau of Labor Statistics announced Friday. Adding insult to injury, already sluggish jobs numbers from March and April were revised downward by 49,000. The year’s early gains are starting to look more like an outlier than a recovery building real momentum. 
 
 There’s no sugar-coating Friday’s report: It’s bad. That makes President Obama’s job that much harder as he tries to gain the upper hand against Mitt Romney on the economy. 
 
 “Today’s weak jobs report is devastating news for American workers and American families,” Mitt Romney said in a statement. “This week has seen a cascade of one bad piece of economic news after another. Slowing GDP growth, plunging consumer confidence, an increase in unemployment claims, and now another dismal jobs report all stand as a harsh indictment of the President’s handling of the economy. It is now clear to everyone that President Obama’s policies have failed to achieve their goals and that the Obama economy is crushing America’s middle class. The president’s re-election slogan may be ‘forward,’ but it seems like we’ve been moving backward. We can do so much better in America. That’s why I’m running for president.” 
 
 The White House pointed to an increase in labor participation as a bright spot, but officials urged Congress to respond with new measures to prevent public-sector job losses and investment in stimulative infrastructure projects. 
 
 “In the American Jobs Act and in the State of the Union Address, the president put forward a number of proposals to create jobs and strengthen the economy, including proposals that would put teachers back in the classroom and cops on the beat, and put our nation’s construction workers back on the job rebuilding our nation’s infrastructure,” Alan Krueger, chairman of the Council of Economic Advisers, said in a statement. 
 
 The numbers come as Obama and Romney are competing to sell their agendas as the fix for the nation’s job woes — and tear down the other guy’s qualifications. 
 
 In Obama’s case, he’s been on the road touting 27 months of private-sector job growth, pointing to successes like the auto rescue in Detroit and trying to remind Americans of the catastrophic 2008 financial collapse he inherited and the Republican administration that presided over it. On offense, his campaign embarked on a lengthy and often tumultuous effort to introduce general election voters to Romney’s history at Bain Capital, highlighting cases where companies taken over by the firm suffered through layoffs and bankruptcy while investors profited handsomely. More recently they’ve tried to undermine Romney through his jobs record as governor, with Obama’s top strategist David Axelrod in Boston Thursday to make the case that Romney sold the state’s voters the same bill of goods about being a “job creator” in 2002 only to see job growth at the 47th worst rate in the nation. 
 
 For Romney, who was thrown off message this week by supporter Donald Trump’s return to the birther cause, the jobs report is a welcome chance to highlight his own economic message. On Thursday, he held an oddly secretive press event outside of a Solyndra building in California, arguing that the solar company’s bankruptcy despite receiving federal loan guarantees was emblematic of the White House’s broader failure to jumpstart the economy with stimulus spending. His latest ad is a feel-good spot pledging that if elected, “President Romney’s leadership puts jobs first.” 
 
 Obama is buoyed by disproportionately stronger growth in key swing states, particularly Ohio and Virginia, but it’s an open question how much of a cushion that will give him if the national recovery continues to slow down. Economists fear that the worst may be yet to come: Europe is still dealing with a debt crisis and another collapse there could spill over into the American economy. 
 
 Benjy Sarlin Benjy Sarlin is a reporter for Talking Points Memo and co-writes the campaign blog, TPM2012. He previously reported for The Daily Beast/Newsweek as their Washington Correspondent and covered local politics for the New York Sun. ||||| This is about as bad as the jobs report could possibly be: just 69,000 jobs created, split between 95,000 new jobs for women and 26,000 fewer jobs for men. The market reaction has been swift and merciless, with stocks and bond yields plunging: the 10-year Treasury bond now yields less than 1.45%. When stock prices fall, of course, the earnings yield on the S&P 500 goes up, even as bond yields go down. Which means that the numbers on this chart are now even more extreme than at the close yesterday: 
 
 The green line, here, should not be able to simply go up and to the right indefinitely. While market failures clearly happen all the time, things are really bad when they persist for this long. And what you’re looking at, here, is a market failure, as Brad DeLong explains: what we’re seeing, he says, is nothing less than “a massive failure of our economic institutions”. 
 
 The first reason betrays a lack of trust that governments can and will do the job that they learned how to do in the Great Depression: keep the flow of spending stable so that big depressions with long-lasting, double-digit unemployment do not recur. The second reveals the financial industry’s failure adequately to mobilize society’s risk-bearing capacity for the service of enterprise. 
 
 Basically, we have low bond yields because the Fed has failed to do its job, and persuade the markets that it is capable of engineering a healthy economy over the long run. And we have high stock yields because the market has failed to do its job, which is to treat high corporate earnings as a fantastic opportunity to invest in the economy and build something even greater in the future. Just look at the amount of money which is flowing straight to corporations’ bottom lines, and not being put to good, productive work. Corporate profits now account for significantly more than 10% of GDP: that’s never happened before. 
 
 To spell this out: high corporate profits and low levels of job growth are two sides of the same coin. If things were working properly right now, companies would take their excess revenues and use them to hire more people. Instead, they’re basically just letting those excess revenues sit on their balance sheets as cash because they’re scared to invest in themselves. It’s frankly pathetic. 
 
 The solution to this problem is nothing complex — the arbitrage is sitting there in the first chart, plain for all to see. The government can borrow at 1.45%: it should do so, in vast quantities, and invest that money back into the economy itself. Take a few hundred billion dollars and use it to fix our broken infrastructure, to re-hire all those laid-off teachers and firefighters, to provide some kind of safety net for the millions of Americans who have been out of work for more than a year. Even if the real long-term return on any stimulus package was zero, the nominal long-term return would be well over 1.45%, making the investment worthwhile. 
 
 To put it another way, not all crises look the same. Back in 2008-9, the fact that we were in a crisis was obvious, and it resulted in unprecedented levels of enormous coordinated actions between Treasury and the Fed. Now, however, when we look at the crisis-level spreads in the first chart, we don’t think “crisis” any more — and the sense of urgency that everybody felt in 2008-9 is long gone. How many more dreadful jobs reports do we need before it returns? 
 
 The 2012 election should be a referendum between two visions of America. On the left, Obama should say that we’re in a jobs crisis, and that he’s going to do everything in his power to get people back to work — by employing them directly, if need be. On the right, Romney can say that job creation should be left to US companies, despite the fact that those companies are signally failing to increase their payrolls despite their record-high profits. And then the public can choose which side they want to vote for. 
 
 Sadly, the lines won’t be drawn nearly that cleanly: Obama is bizarrely reluctant to talk about anything which rhymes with “stimulus”. As a result, the current dysfunction — and horribly weak jobs market — is likely to persist for far too long.
– You don't have to look at the sinking Dow—which is now in negative territory for the year—to get a sense of just how bleak today's jobs report was. A glance at financial blogs offers a depressing reminder: Felix Salmon, Reuters: It's "about as bad the jobs report could possibly be." We're in a crisis, and the government's response should be clear: Borrow money at the low rates now available and re-invest in the economy through infrastructure spending, etc. Unfortunately, "Obama is bizarrely reluctant to talk about anything which rhymes with 'stimulus.' As a result, the current dysfunction—and horribly weak jobs market—is likely to persist for far too long." David Leonhardt, New York Times: The report is "terrible" and marks the third straight year of a spring slump. "What happens now? Don’t expect much action from Congress, despite the talk you will hear. The jobs numbers will certainly raise the odds of further action by the Federal Reserve, but it’s not clear by how much. Perhaps most important, the decisions of European policy makers loom even larger now." From the right: It's an "unmitigated flop," writes Ed Morrissey at Hot Air. "There is no positive spin that can be put on this report. It’s an indictment of Obama’s stagnation and incompetence at economics." From the left: "There’s no sugar-coating Friday’s report: It’s bad," writes Benjy Sarlin at Talking Points Memo. "That makes President Obama’s job that much harder as he tries to gain the upper hand against Mitt Romney on the economy." Swing states are doing better, "but it’s an open question how much of a cushion that will give him if the national recovery continues to slow down."