Friday, June 05, 2009
The Labor Department reported the unemployment rate rose sharply to a 26-year high in May but layoffs slowed significantly, the lowest net job loss in eight months.
Nonfarm payrolls fell by 345,000 last month following six months of declines that averaged almost 650,000, however, the jobless rate continued to rise, increasing from 8.9 to 9.4 percent, an indication that, while layoffs may have peaked, employers are reluctant to hire.
The unemployment rate now stands at its highest level since August of 1983, still well shy of the 10.8 percent level reached in late-1982. A total of 14.5 million Americans are now classified as unemployed and, if discouraged workers and those taking part-time work instead of full-time work are included, the unemployment rate stands at 16.4 percent, the highest level since record keeping began 15 years ago.
Job losses in May were widespread but the manufacturing sector was hardest hit with a total of 156,000 fewer workers. Payrolls fell by an average of 55,000 in construction, trade, and professional services while the leisure and hospitality sector added 3,000 jobs, the first increase in 17 months.
As always, education and health care payrolls expanded, by 44,000 in May after a modest increase of just 13,000 in April, and the various levels of government had a net loss of 7,000 jobs after adding 92,000 positions in April in preparation for the 2010 census.
Since the start of the recession 17 months ago, the economy has shed 6.0 million jobs, however, the worst of the job loss appears to be over. Attention now turns to the problem of high unemployment and how laid-off workers will adapt to an economy that has changed radically since the current recession began in December 2007.