Key developing countries, such as China, India and Brazil, are also reporting weaker growth. Those countries are big markets for U.S. heavy machinery. U.S. farmers also export corn, soybeans and other grains to China.
"You've got deterioration on all fronts at this point," said Scott Anderson, an economist at Wells Fargo Securities.
Anderson said Wells Fargo will likely reduce its forecasts for U.S. growth.
Still, some trends remain positive for the U.S. economy. Gas prices have been falling, which puts more money in Americans' pockets. With mortgage rates at record lows, more Americans are buying homes. Builders have increased spending on construction. Auto sales are up.
Maury Harris, chief U.S. economist at UBS, said the weak May jobs report shows businesses are nervous about the economic outlook. Yet consumers remain willing to spend. Their spending rose 0.3 percent in April, above the 0.2 percent rise in March. That qualifies as a bright spot in last week's reports. Harris expects consumer spending to keep rising and to reinvigorate business activity by fall.
Jack Kleinhenz, chief economist at the National Retail Federation, the nation's largest retail trade group, says he's sticking with the group's annual retail sales growth forecast of 3.4 percent for now.
"I'm concerned, but I am not ready to put up a red flag on everything," Kleinhenz said.
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AP Business Writer Anne D'Innocenzio in New York contributed to this report.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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