Jobless rate jumps to 5.5, biggest rise since 1986

June 6, 2008

Reported excerpts from Huffington Post


WASHINGTON — 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 dwindling job opportunities in a time of continuing hardship in the housing, credit and financial sectors.


“It was ugly,” said Richard Yamarone, economist at Argus Research.


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 White House expressed disappointment, too.


“Certainly this isn’t a report that we wanted to see today,” White House deputy press secretary Scott Stanzel said. He acknowledged that the increase was higher than experts expected. “It is a number that is too high in our view but it is lower than the average of the last three decades.”


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 _ especially younger people _ 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.


“For the average American there is not debate that the economy is in a recession,” said Mark Zandi, chief economist at Moody’s “That’s because their net worth is lower, their purchasing power is lower and it is tough to find a job. If you lose a job, it is tough to get back in,” he said.


So far this year, the government said, job losses have totaled 324,000.


Our Perspective:


This certainly is not good news. School is just getting out and the market will be flooded with new graduates, plus those still in school seeking summer employment.


I would note that people we speak to are nervous, there is still too much uncertainty. They are trying to keep a stiff upper lip, thinking we will work our way thru it. But what will be the casualties we will inflict on the American public?


Energy prices may drop down a bit but they will not return to previous levels. The bar keeps getting pushed higher and we are told to jump.


Let us know your thoughts?


You may email

One Response to “Jobless rate jumps to 5.5, biggest rise since 1986”

  1. Susan Kennedy said

    Yes things seem bad statistically but my dad always said, ‘it only takes one person’s will to get a job and one person is not a statistic”. Lots of 100K jobs FOR THE TAKING-

    You See!

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