Archive for Saturday, June 7, 2008

Unemployment rate makes biggest jump since 1986

June 7, 2008

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— Pink slips piled up and jobs disappeared into thin air in May as the nation's unemployment rate zoomed to 5.5 percent in the biggest one-month jump in decades. Wall Street swooned, and the White House said President Bush was considering new proposals to revive the economy.

Help-wanted signs are vanishing along with jobs, so the unemployment rate is likely to keep climbing, a government report indicated, underscoring the toll the housing and credit crises are taking on jobseekers, employers and the economy as a whole.

Adding to the pain, oil prices soared to a new record high, while the value of the dollar fell.

The Dow Jones industrials tumbled almost 400 points.

The White House snapped into crisis-management mode. The president is now considering further plans to help energize the economy, which had already been teetering on the edge of recession, said counselor Ed Gillespie. Bush acknowledged, "This is a time of turbulence in the housing market and slow growth for our overall economy."

Pounded by soaring energy prices and plagued by uncertainty, nervous employers clamped down further on hiring in May.

Friday's Labor Department report was filled with sobering numbers:

l Employers eliminated 49,000 jobs in May, the fifth straight month of nationwide losses.

l The number of unemployed people grew by 861,000 - to 8.5 million.

l Job losses for the year reached 324,000.

Longer unemployment lines mean even more angst for those seeking work.

Barbara Bowens, 52, of Washington, D.C., has been laid off from a janitorial job since March. The prospects of finding a new job "don't look so good," she said. "I can't pay bills off nothing." Collecting unemployment benefits helps, but "I've got to pinch pennies."

Cheryl Williams, who lives in the Tulsa, Okla., suburb of Broken Arrow, has been looking for work for two years after losing her job as a certified nurse's aide. The 37-year-old relies on $225 a month in welfare and odds-and-ends jobs to support her two kids.

"I have job searched and job searched and job searched," Williams said. "I would like to have a real job."

Just in the past several days General Motors Corp., United Airlines and others have joined the flurry of job-cut announcements.

The unemployment rate shot up from 5 percent in April, reflecting more workers losing their jobs as well as an influx of young people looking for work. It was the biggest over-the-month swing in the rate since February 1986. The increase left the jobless rate at its highest since October 2004.

The unemployment rate for blacks climbed to 9.7 percent, the highest since late 2005. The rate for Hispanics held steady at 6.9 percent.

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