WASHINGTON, June 6, 2008
Unemployment Makes Dramatic Leap
Jump To 5.5 Percent In May Is Largest Increase Since 1986; 8.5M Americans Out Of Work
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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. (iStockphoto)
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- Mixed Numbers On U.S. Jobless
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.
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 White House quickly responded to the unemployment numbers by saying it was “not the report we wanted to see.”
But spokesman Scott Stanzel told CBS News White House Correspondent Mark Knoller that even an unemployment rate at 5.5% - which he says is “too high” - is lower than the average in the 1970s, 80s and 90s. The spokesman also said White House analysis shows the increase is mostly attributed to new job seekers and not a broad increase in layoffs.
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.
The startling news followed Thursday's Labor Department report that showed applications for unemployment benefits totaled 357,000 last week, some 18,000 fewer than the previous week. That pushed applications for benefits to their lowest level since mid-April.
However, the four-week average for people receiving benefits edged up to 3.086 million, the highest level since March 6, 2004, when the country was still struggling to recover from a prolonged period of rising unemployment.
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.
So far this year, the government said, job losses have totaled 324,000.
Workers with jobs, however, saw modest gains.
Average hourly earnings for jobholders rose to $17.94 in May, up 0.3 percent from the previous month. Economists were forecasting a 0.2 percent gain. Over the last 12 months, wages have grown by 3.5 percent.
With food and energy prices marching upward, paychecks aren't stretching as far. Although tax rebates helped to energize shoppers and give major retailers better sales in May, analysts still believe that anxious consumers will be keeping a close watch on their purchases and their budgets in the months ahead.
Worried about inflation, Federal Reserve Chairman Ben Bernanke has signaled that the central bank's rate-cutting campaign, which commenced last September to help bolster the economy, is probably over for now.
Fed officials and the Bush administration are hoping that the Fed's powerful doses of rate reductions and the government's $168 billion stimulus package, including tax rebates for people and tax breaks for businesses, will pull the economy out of its deep funk in the second half of this year.
Even if that happens, the unemployment rate is expected to climb to 6 percent or higher early next year. Employers won't want to ramp up hiring until they feel more sure that an economic recovery has strong legs.
This prolonged stretch of job cuts has many economists believing the country has fallen into a recession.
However, the overall economy as measured by the gross domestic product has managed to remain in positive territory with the GDP growing at an annual rate of 0.9 percent in the first three months of the year.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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See all 292 CommentsWhy doesn''t ANY media portray the numbers that REALLY matter?! With one percent of the population holding the majority of everything, the term "average" is meaningless.
Tell us what the MEDIAN hourly earnings are for americans... bet it''s less then half of the "average" number that the media keeps pushing down our throats.
Don''t worry America, all those tax cuts Republicans gave to the super-rich are going to trickle down to you eventually. Right?
Posted by gopsoccermom
gopsoccermom, you''re a hoot. Thanks for the laugh.
They''re running on hope at the moment, taking comfort from the odd tidbits of good news.
Who cares if you lose your job, are going to lose your house, have spent you tax rebate money on gas for the car and groceries for the family, and can''t even think about seeing a doctor, dentist, or going to a "non-profit" hospital?
Despite this, "Bagdad John" wants us all to be "safe and secure" by fighting the "terrrrrrrrorists" in Iraq instead of making life better for US HERE and having the wealthy and elite continue to lead the "American Dream" even though you can''t afford it now!
How about having a few debates, not at a town hall, but at an unemployment office! You NEVER see a politican, neither neocon Fascist Nazi Republican or cowardly Whimpo-crat, even NEAR an unemployment office! Train stations are OK, even post offices are OK, but definitely NOT unemployment offices.
Unfortunately for "Bagdad John" and the neocon Fascist Nazis, unemployed people VOTE TOO!!
SIG HEIL, BUSH!!!!
sig heil, DEFINITELY MORE OF THE SAME, McCain!!!!
posted by briannorwood
He''ll offer them military positions to continue the invasion in Iraq, that''s what.
-John McCain (Jan. 30 Republican debate)
Posted by omega39 at 09:52 AM : Jun 06, 2008
At least 12% according to some estimates
www.shadowstats.com/alternate_data
Like a perfect storm that has been forming over Washington the neo cons continue to act as though we are listening to them. We our your masters politicians and yet you still have a small following but it will soon end.
Too little too late. Any one want to bet that in the next month they issue an extension of unemployment benefits. And of course the village idiot like his father before him will veto it but this time out of fear the neo cons will veto him.
It is coming boys and girls.
LOL -- good idea, selling tents what do reckon?
Hey liberals, Broadcom is hiring! Occupations right up your alley too!
At least 12% according to some estimates
www.shadowstats.com/alterna
te_data
Posted by bgwinnett
Yeah, he has the U6 at almost 13% the BLS is claiming 9.7%.
If we as a people didn''t have this undying sense of entitlement, maybe, just MAYBE, energy resources would still be affordable.
And, lastly, if more people who voted in the 2004 election didn''t act like lemmings, we wouldn''t have endured another four years of an imbecile at the helm!
You people amaze me. The gap between the rich and the rest have grown to levels not seen since the Great Depression and you are questioning the average man''s sense of entitlement? Your approach is WAY OFF mark. We should be questioning why the rich can''t be satisfied with three yachts instead of four...not with why a middle class person should want to have affordable healthcare for his or her children. Get a clue!
You are the type of person who jumped out of the buildings during the last Great Depression. You are a fool and a tool who has forgotten the road to poverty is a lot shorter than the road to wealth.
You have forgotten what the government is...it is us. I''d rather my tax dollars be used to improve than used to destroy. You wouldn''t know about this because you''re too busy getting excited about bombing people.
signed, typical lib loser
Posted by jamesm12341
I know lots of degreed engineers that are sitting around unemployed after their jobs were shipped to China or an H1B1 candidate was imported to work for 40% less.
Dear Mr. Obama: Help me please!! The only jobs I am qualified for are being taken by people that dont even speak english. I have no other skills. I spend my days and nights on cbsnews.com blaming Bush for me not having a job. I know deep down it is not his fault tho, after all he wasn''''t around when I was in highschool goofing around instead of getting an education. But I blame Bush anyway, it gives me temporary relief to my worthless life. Can you help me? signed, typical lib loser Posted by jamesm12341
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lol - please note I do not care if you raise the taxes Mr. Obama because I pay none anyway. Just give me my handout.
Exactly. The jobs to move away recently have been white collar jobs as the greedy look to make more and more money on the backs of cheaper and cheaper labor. Greed is the new religion. When people vote GOP, they are voting against themselves...unless they are part of the wealthy 2%.
People like YOU amaze ME! Are you jealous that you don''t have the three yachts?
I do have to agree with you on the healthcare issue - however, if people in this country weren''t so sue-happy, then the physicians and hospitals wouldn''t be paying so much for malpractice insurance. Anyone in the healthcare industry will tell you that besides malpractice insurance premiums, the other biggest thing contributing to the outrageous cost is most people don''t take care of themselves! Have you SEEN the obesity rates? Another example of entitlement.
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How did people goofing off in high school cause the economy to tank in just this administration, and unemployment to rise at the greatest rate since 1986 when this president''s father was lurking in the White House?
I thought we were blaming it on 9/11.
I have several degrees and own a business. I don''t need much and I support several kids through university. I am a Christian but do not wear it on my sleeves. I think it''s more important to show your faith through actions instead of words. Greed is a sin, like any other sin. I couldn''t in my heart drive around with three yachts knowing I was laying off people from work. Sorry, if you think that is jealousy, I will accept it.
Another nail in the rep coffin. By election time they will be ready for burial and voted right out the door. It is possible to see a filibuster proof Senate. Already conservative estimates say the dems could pick up 6 senate seats and they only need 9.
The unemployment problem is no joke! You think it''s funny, but you or I could be next!
Posted by jamesm12341
James, watch the video and see why the American worker is struggling. Most people don''t want a "handout" but they do expect their government to provide a level playing field.
http://www.youtube.com/programmersguild
Posted by jamesm12341
James, watch the video and see why the American worker is struggling. Most people don''t want a "handout" but they do expect their government to provide a level playing field.
http://www.youtube.com/programmersguild
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You can blame it on whoever you wish - that is the unique thing about the US. LOL
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