Unemployment rate sees largest monthly jump since 1986
By DIANE STAFFORD
The Kansas City Star
The national unemployment rate increased by a half percentage point in May, the largest monthly jump since 1986, and employers cut 49,000 jobs.
It was the fifth straight month of payroll declines.
There are about 1.5 million more unemployed job hunters now than at this time a year ago, the U.S. Bureau of Labor Statistics said Friday. An estimated 8.5 million unemployed people are looking for work.
Joblessness in May soared to 5.5 percent, up from 5 percent in April, reaching its highest rate since October 2004. That report and a $10.75 jump in the price of a barrel of oil slammed the markets, with the Dow Jones industrial average falling nearly 400 points. (See stories on A1 and C3.)
“The numbers are consistent with an economy on the edge of recession, if not in one,” said Frank Lenk, chief economist at the Mid-America Regional Council in Kansas City. “Since payroll employment data tends to get revised downward once all the data is collected, it might be worse than the current data suggests.”
The statistics bureau’s report did, indeed, issue revised employment counts for March and April, indicating that employers had 15,000 fewer workers on their payrolls in April and 15,000 fewer on their March payrolls than initially estimated for those months.
The jobs report indicated that the January-May period this year represents the first time since February-June 2003 that national payrolls declined for five consecutive months.
“The economy has clearly slipped into a mild jobs recession because the housing meltdown and credit market turmoil has spread to the broader economy,” Steven A. Wood of Insight Economics wrote in an analysis. “Persistent job losses will eventually pull the overall economy into recession.”
A 5.5 percent unemployment rate is low by historical standards, but continued payroll cuts — in manufacturing, construction, retail and temporary help services — signal a recessionary job market.
One small bright spot in the May report was the continued addition of jobs in the health care sector.
Overall, joblessness rose partly because of payroll cuts and partly because of an increase in new entrants and re-entrants to the labor force. New entrants traditionally increase in May as students look for work at the end of the school year.
The teen unemployment rate jumped from 15.4 percent in April to 18.7 percent in May.
“That tells you something about what’s happening at the family level,” said David Rosenberg, North American economist at Merrill Lynch & Co. “Parents are telling their kids to look for work, and the jobs aren’t there.”
More than a half million new and re-entering workers searched for jobs in May, according to preliminary estimates. In all, about 861,000 more workers were out of work and looking for jobs than in April.
In the Kansas City area, one indicator of increased joblessness is higher attendance at job loss support groups.
Laura Johannesmeyer, who leads one of the largest such groups through the community career services office at Johnson County Community College, said attendance at the weekly “job club” meetings was nearly double in May what it was earlier this year.
“It’s mainly (because of) layoffs,” Johannesmeyer said. “I’m not seeing retirees re-entering the job market or students. It’s mostly mid-career people. But we are seeing some success in landing good jobs. In that respect, it’s better than 2003, when we were just seeing layoffs.”
Christine Owens, executive director of the National Employment Law Project, a worker advocacy organization, repeated a call for Congress to authorize extended unemployment benefits to jobless workers who have exhausted their state benefits.
State unemployment checks are capped at 26 weeks. More than 18 percent of job hunters nationally have been out of work for 27 weeks or more.
“The House of Representatives should join the Senate, which voted … to extend benefits, and pass an extension,” Owens said, noting that emergency federal benefits were a part of the economic recovery package in the previous recession.
The report also sounded a sour economic note for many workers who continue to be employed. Adjusted for inflation, average earnings are falling below the pace of price increases.
In the last 12 months, average hourly earnings rose 3.5 percent, while the inflation rate has been rising at a nearly 4 percent pace.
Average weekly earnings rose 3.2 percent, the statistics bureau said.
Slicing and dicing employment data The economy shed 49,000 jobs in May. So far this year, employment is off 324,000 jobs. Construction, manufacturing, retail trade and temporary help lost jobs, while health care again added jobs.
•Construction fell by 34,000. Since an employment peak in September 2006, construction has lost 475,000 jobs as the housing market has tumbled. Residential construction shed 19,000 jobs, and non-residential was off 12,000 jobs.
•Manufacturing employment continued to fall, losing 26,000 jobs, including 8,000 jobs lost in computer manufacturing. So far in 2008, monthly job losses in manufacturing have averaged 41,000, compared with 22,000 a month in 2007 and 14,000 a month in 2006. With further cuts in the auto industry, this category can expect to fall further in coming months.
•Retail trade employment decreased by 27,000, with most of the decline coming from department stores, down 15,000, and gas stations, off 6,000.
•Since March 2007, retail trade has shed 184,000 jobs.
•Professional services, which is getting rid of financial sector jobs, was off 39,000 in May. Once a bright spot, the industry has lost 24,000 jobs in 2008 alone.
•Health care added 34,000 in May and 383,000 jobs in the last 12 months.
•Also in the service sector, restaurants and bars continued an upward trend.
The Star’s wire services contributed to this report. To reach Diane Stafford, call 816-234-4359 or send e-mail to stafford@kcstar.com.
The Kansas City Star
The national unemployment rate increased by a half percentage point in May, the largest monthly jump since 1986, and employers cut 49,000 jobs.
It was the fifth straight month of payroll declines.
There are about 1.5 million more unemployed job hunters now than at this time a year ago, the U.S. Bureau of Labor Statistics said Friday. An estimated 8.5 million unemployed people are looking for work.
Joblessness in May soared to 5.5 percent, up from 5 percent in April, reaching its highest rate since October 2004. That report and a $10.75 jump in the price of a barrel of oil slammed the markets, with the Dow Jones industrial average falling nearly 400 points. (See stories on A1 and C3.)
“The numbers are consistent with an economy on the edge of recession, if not in one,” said Frank Lenk, chief economist at the Mid-America Regional Council in Kansas City. “Since payroll employment data tends to get revised downward once all the data is collected, it might be worse than the current data suggests.”
The statistics bureau’s report did, indeed, issue revised employment counts for March and April, indicating that employers had 15,000 fewer workers on their payrolls in April and 15,000 fewer on their March payrolls than initially estimated for those months.
The jobs report indicated that the January-May period this year represents the first time since February-June 2003 that national payrolls declined for five consecutive months.
“The economy has clearly slipped into a mild jobs recession because the housing meltdown and credit market turmoil has spread to the broader economy,” Steven A. Wood of Insight Economics wrote in an analysis. “Persistent job losses will eventually pull the overall economy into recession.”
A 5.5 percent unemployment rate is low by historical standards, but continued payroll cuts — in manufacturing, construction, retail and temporary help services — signal a recessionary job market.
One small bright spot in the May report was the continued addition of jobs in the health care sector.
Overall, joblessness rose partly because of payroll cuts and partly because of an increase in new entrants and re-entrants to the labor force. New entrants traditionally increase in May as students look for work at the end of the school year.
The teen unemployment rate jumped from 15.4 percent in April to 18.7 percent in May.
“That tells you something about what’s happening at the family level,” said David Rosenberg, North American economist at Merrill Lynch & Co. “Parents are telling their kids to look for work, and the jobs aren’t there.”
More than a half million new and re-entering workers searched for jobs in May, according to preliminary estimates. In all, about 861,000 more workers were out of work and looking for jobs than in April.
In the Kansas City area, one indicator of increased joblessness is higher attendance at job loss support groups.
Laura Johannesmeyer, who leads one of the largest such groups through the community career services office at Johnson County Community College, said attendance at the weekly “job club” meetings was nearly double in May what it was earlier this year.
“It’s mainly (because of) layoffs,” Johannesmeyer said. “I’m not seeing retirees re-entering the job market or students. It’s mostly mid-career people. But we are seeing some success in landing good jobs. In that respect, it’s better than 2003, when we were just seeing layoffs.”
Christine Owens, executive director of the National Employment Law Project, a worker advocacy organization, repeated a call for Congress to authorize extended unemployment benefits to jobless workers who have exhausted their state benefits.
State unemployment checks are capped at 26 weeks. More than 18 percent of job hunters nationally have been out of work for 27 weeks or more.
“The House of Representatives should join the Senate, which voted … to extend benefits, and pass an extension,” Owens said, noting that emergency federal benefits were a part of the economic recovery package in the previous recession.
The report also sounded a sour economic note for many workers who continue to be employed. Adjusted for inflation, average earnings are falling below the pace of price increases.
In the last 12 months, average hourly earnings rose 3.5 percent, while the inflation rate has been rising at a nearly 4 percent pace.
Average weekly earnings rose 3.2 percent, the statistics bureau said.
Slicing and dicing employment data The economy shed 49,000 jobs in May. So far this year, employment is off 324,000 jobs. Construction, manufacturing, retail trade and temporary help lost jobs, while health care again added jobs.
•Construction fell by 34,000. Since an employment peak in September 2006, construction has lost 475,000 jobs as the housing market has tumbled. Residential construction shed 19,000 jobs, and non-residential was off 12,000 jobs.
•Manufacturing employment continued to fall, losing 26,000 jobs, including 8,000 jobs lost in computer manufacturing. So far in 2008, monthly job losses in manufacturing have averaged 41,000, compared with 22,000 a month in 2007 and 14,000 a month in 2006. With further cuts in the auto industry, this category can expect to fall further in coming months.
•Retail trade employment decreased by 27,000, with most of the decline coming from department stores, down 15,000, and gas stations, off 6,000.
•Since March 2007, retail trade has shed 184,000 jobs.
•Professional services, which is getting rid of financial sector jobs, was off 39,000 in May. Once a bright spot, the industry has lost 24,000 jobs in 2008 alone.
•Health care added 34,000 in May and 383,000 jobs in the last 12 months.
•Also in the service sector, restaurants and bars continued an upward trend.
The Star’s wire services contributed to this report. To reach Diane Stafford, call 816-234-4359 or send e-mail to stafford@kcstar.com.
Labels: BLS, unemployment, USA
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