A Second Look At America's Economic Reality

toggle caption Tony Dejak/AP

It's been a tough week for the U.S. economy.

Housing prices continued to fall, the stock market dropped again for the fifth week in a row, but it was the job numbers that really hit home: Employers added just 54,000 jobs in May. That's the fewest in the last eight months. The unemployment rate unexpectedly rose to 9.1 percent.

For some of the millions who have been out of work for years, this is starting to feel like the new normal.

Theresa Iacovo, 49, of Long Island, N.Y., lost her job in the fall of 2008 after 30 years as a dispatcher.

"I expected that I would be back during that season. I didn't expect that I would be out of work for the whole winter, and then the next winter and then the next winter."

Iacovo says she and other unemployed people in her age group are being phased out of the workforce.

"If you get a job you're only getting something at minimum wage, with minimum benefits or mostly just part-time," she says. "You're not realizing that this is the end of your work life or your career as you knew it.

"Everything has been an adjustment because life isn't the way it used to be."

And America's economy isn't the way it used to be either. After a few years of long-term unemployment and a slow recovery that seems to be taking a few steps back, the days of low unemployment may be nothing more than a distant memory.

"I cannot foresee any time in the future that we're going to get an unemployment rate below 7 percent," says Reuters finance blogger Felix Salmon.

Unemployment Is Not The Problem

But Salmon says the unemployment rate is not actually the most important factor.

"It doesn't really matter economically speaking whether you're looking for work or not. What matters is whether you have a job or not," he says. "So what we really want to be concentrating on is creating jobs."

Job creation is the key. And it's highly unlikely that that will happen without a second stimulus, and Salmon says, "stimulus is a dirty word in Washington right now."

And with what's sure to be a challenging election season, learning to live with less is not the best campaign slogan for President Obama.

No president since Franklin D. Roosevelt has been re-elected with an unemployment rate higher than 7.2 percent. So Obama is asking voters for patience.

"It's one thing to ask for patience in February 2009 and something else to ask for patience in October of 2012," says NPR's White House correspondent Scott Horsley.

The Obama administration was able to relish the job gains in February, March and April, but the slowdown in May could mean trouble.

"The president's own job may depend on whether that's just a one month hiccup or whether it's a sign of something more ominous to come," says Horsley.