American employers in May added the smallest number of workers in a year and the unemployment rate unexpectedly increased as job-seekers re-entered the workforce, further evidence that the labor-market recovery is stalling.

Payrolls climbed by 69,000 last month, less than the most pessimistic forecast in a Bloomberg News survey, after a revised 77,000 gain in April that was smaller than initially estimated, Labor Department figures showed today in Washington. The median estimate called for a 150,000 May advance. The jobless rate rose to 8.2 percent from 8.1 percent, while hours worked declined.

Bigger job and wage gains are needed to jumpstart a self-sustaining increase in hiring and consumer spending that will boost the expansion. At the same time, a looming recession in the euro area and slower growth in China and Brazil may prompt American companies to reduce headcount until they see more evidence the U.S. economy isn't faltering.