Friday, June 06, 2008
Normally, the unemployment rate isn't given much attention around here, however, when it posts its biggest monthly increase in 22 years - from 5.0 to 5.5 percent - then it's worth making up an extra chart. The jobless rate is now at its highest since October 2004.
The household survey indicated the number of unemployed rose by 861,000 last month to 8.5 million. A year ago, the unemployment rate was 4.5 percent and the number of unemployed stood at 6.9 million.
The establishment survey indicated a total job loss of 49,000 in May, continuing the string of declines that now totals 324,000 during the first five months of 2008. Data for both March and April were revised to show slightly larger declines than initially reported.
Job creation occurred in the usual areas - health care and government, which, in many cases are one and the same. Where would the nation be without sick people and the ability to borrow/create the money needed to pay for their care?
There was also little change in where job losses occurred in May. Payrolls declined in construction for the 16th month out of the last 20 and, for manufacturing, this marked the 23rd consecutive month of net job losses.
Retail trade (within the Trade, Transportation, and Utilities group above) has taken a decided turn for the worse over the last six months posting consecutive declines of 25K, 16K, 43K, 27K, 39K, and then 27K last month.
This will likely take a bit of the wind out of the sails of the Federal Reserve as they contemplate raising interest rates later this year to "fight" the inflation that they've created over the last nine months.