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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
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And I'm Audie Cornish. American businesses are hiring, but the pace is slowing down and that may be a sign of trouble for the economic recovery. The U.S. gained just 69,000 jobs in May. We were seeing much better growth at the start of the year.
NPR's Chris Arnold reports on what's behind this change and what it means looking forward.
CHRIS ARNOLD, BYLINE: It's pretty amazing how many different kinds of businesses there are in this country. If there's a need out there of any kind, some entrepreneur will start a company. And, despite the worst recession in generations, there are still thousands of small businesses plugging away, trying to grow and hire more people.
SRINIVAS KONANKI: This year, we hired two more technicians and we hope to hire one more.
ARNOLD: Srinivas Konanki runs a business with his wife just outside Boston. They employ 20 people and what they do is they calibrate just one type of scientific laboratory equipment. They work on what are called pipettes, which measure and dispense liquids. The company is called Pipette Calibration Services.
KONANKI: What I have in my hand is a single channel pipette. It's a manual pipette. As you notice, I can change the volume setting.
ARNOLD: So this is basically like a fancy squirt gun. I mean, you know, you just suck up a little water and squirt it out. Right?
KONANKI: Squirt it. The difference is, here, you actually measure what you're squirting, whereas, in a squirt gun, you're just shooting it. And so this is very accurate volume.
ARNOLD: Manjula Konanki says her husband knows a lot about pipettes.
MANJULA KONANKI: Srinivas can talk to you for a few hours about that if you want to. Yeah.
ARNOLD: But a cup of coffee and an artful change of subject later and we get down to the matter at hand, job growth. And, for any business, that has a lot to do with confidence. If you're going to hire somebody, you have to be optimistic that business will keep picking up.
KONANKI: And we, as a small business, have been very careful as to how we spend our money.
ARNOLD: And, lately, there's been plenty of cause to be concerned. The economy in Europe is looking worse again. Many European companies have research labs right around here, around Boston.
KONANKI: And when they make cuts, they make cuts all over and when that happens, we see our business cut down.
ARNOLD: The other big concern for Srinivas is cutbacks in U.S. government spending. He's worried about whether the NIH will wind up getting cut. That's the National Institutes of Health.
KONANKI: Even a couple of percentage points funding if they cut to the NIH, it definitely makes a big difference to all the labs out here. And that'll definitely affect our business.
ARNOLD: And these are the same things that many other companies and economists are thinking about, too.
BETSEY STEVENSON: The risks he talked about were risks of Europe.
ARNOLD: Betsey Stevenson is a labor economist with the University of Pennsylvania's Wharton School. She says Europe could be creating a headwind on hiring and she says many other businesses are worried about what the U.S. government's going to do as we approach what's called the fiscal cliff at the end of the year.
Congress needs to decide if it's going to extend the Bush tax cuts, what to do with unemployment benefits and required spending cuts. There's all sorts of things Congress needs to deal with.
STEVENSON: Congress is saying we're going to make this difficult. You know, this sends a signal to everyone in the economy that there's a potential for real damage to our economy coming in the future and you should prepare for it today.
ARNOLD: Still, even with all these question marks, the U.S. is managing to add some jobs every month.
DAVID KOTOK: We've had slow growth, but it is growth, not shrink.
ARNOLD: That's David Kotok, the chief economist at Cumberland Advisors. He says, yes, in recent months, we've been adding fewer jobs than we were at the start of the year and that's definitely disappointing, but Kotok actually sees some reasons to be optimistic.
KOTOK: I see three sectors now doing better. The manufacturing sector is growing in the United States and, as it does, it produces a higher paying job.
ARNOLD: Same thing, Kotok says, goes for the energy sector. The rapid growth in natural gas exploration will mean a lot of work that pays well.
KOTOK: And the third piece is the gradual stabilization of housing. It's happening slowly, but it's happening.
ARNOLD: And, at some point, that means more jobs for carpenters, electricians and lots of other people. Kotok is the chief investment officer for his firm. It manages billions of dollars, so he has to put his money where his mouth is on this stuff and he says he is placing his chips on a slow, but continued recovery for the economy and employment.
Chris Arnold, NPR News, Boston. Transcript provided by NPR, Copyright National Public Radio.