National jobless rate jumps
Friday, June 6, 2008 10:42 AM PDT
WASHINGTON (AP) — The nation’s unemployment rate jumped to 5.5 percent in May — the biggest monthly rise since 1986 — as nervous employers cut 49,000 jobs.
The latest snapshot of business conditions showed a deeply troubled economy, with job opportunities dwindling in a time of continuing hardship in the housing, credit and financial sectors.
With employers worried about a sharp slowdown and their own prospects, they clamped down on hiring in May, said Friday’s report from the Labor Department. The unemployment rate soared from 5 percent in April to 5.5 percent in May. That was the biggest one-month jump in the rate since February 1986. The increase left the jobless rate at its highest since October 2004.
The big jump in the unemployment rate surprised economists who were forecasting a tick-up to 5.1 percent. Payroll losses, however, weren’t as deep as the 60,000 that analysts were bracing for. Still, job losses in both March and April turned out to be larger than the government previously reported. Employers now have cut payrolls for five straight months.
The 5.5 percent rate is relatively moderate judged by historical standards. Yet, there was no question that employers last month sharply cut jobs in manufacturing, construction, retailing and professional and businesses services. Those losses swamped gains elsewhere, including in the education and health fields, government and leisure and hospitality.
The government said the number of unemployed people grew by 861,000 in May — rising to 8.5 million. The over-the-month jump in unemployment reflected more workers losing their jobs as well as an increase in those coming into the job market to look for work, the Bureau of Labor Statistics said.
A year ago, the number of unemployed stood at 6.9 million and the jobless rate was 4.5 percent.
A trio of crises — housing, credit and financial — have rocked the economy. That’s caused economic growth to slow to a crawl as businesses and consumers have tightened their belts. Spiraling energy costs are another negative force.
The country’s economic problems are a top concern for voters — and thus for President Bush, lawmakers on Capitol Hill and those vying to win the White House this fall.
