Unemployment posts its biggest monthly increase in 22 years (since February, 1986) as it jumped from 5.0 to 5.5 percent in May. The household survey indicated the number of unemployed rose by 861,000 last month to 8.5 million. A year ago, the unemployment rate was 4.5 percent and the number of unemployed stood at 6.9 million.
The jobless rate is now at its peak in 3.5 years (since October 2004).
Job Losses
The report indicated 49,000 American non-farm jobs vanished in May. This last fall sustained the series of declines that now totals 324,000 for the first five months of 2008. Payrolls declined in construction for the 16th month out of the last 20; and for manufacturing, this marked the 23rd consecutive month of net job losses for the period ending in May.
The shrinking payrolls, combined with the big jump in the unemployment rate reports put instant downward pressure on capital market.
Workers will find it harder to get a job, a raise, or a bonus. The job losses and sharp rise in the unemployment add more burden to households as they have suffered from falling house prices, expensive borrowing, and soaring gasoline prices. These combined factors will continue to depress consumer spending. The job figures validate the American economy is already in a possibly long and deep recession.
2 comments:
Soaring prices, from gas to food, have ballooned our expenses. Now, what can we do without job?
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