Job Losses Slow, but Unemployment Hits 9.4%
The May job losses, the lowest since September, indicated a sharp decline in cuts and were lower than the 550,000 some economists expected, reported Forbes, raising the hopes of some analysts.
“This tide is turning,” Richard Yamarone, an economist at Argus told the Associated Press. “We expect this trend of slower job loss to continue throughout the year.”
However, unemployment rate jumped to 9.4 percent up from 8.9 percent in April. There are about 14.5 million unemployed in the United States.
“These are still terrible numbers,” Ian Shepherdson, chief United States economist at High Frequency Economics told the New York Times. “We’re a million miles away from a recovery.”
Even if the number of new job losses continues to decline, economists highlight that the job market will continue to be very difficult for those laid off and looking for new work.
Dante Chinni, director of the Christian Science Monitor’s Patchwork Nation project, said analysts are starting to accept that the economy may have finally bottomed out.
Looking at the most recent county level data for jobs and unemployment from April, Chinni said some types of communities, like wealthy suburbs, are already seeing improvement.
Hear Chinni’s breakdown of which types of communities are doing well, and which ones are still struggling:
The economy has now lost 6 million jobs since the economic crisis started in December 2007, with most of those losses occurring in the last six months
Federal Reserve Chairman Ben Bernanke warned Wednesday that the labor market “tends to lag” behind the business cycle, so that unemployment can remain high even as the economy starts to recover, the Wall Street Journal reported.
Another challenge facing households is the rising rate of underemployment, including involuntary part-time workers. Combined underemployment and unemployed hit 16.4 percent in May, almost seven percentage points higher than it was a year ago.
But temporary employment, which many economists consider a leading indicator, fell by only 6,500 jobs, in May, the smallest decline in months.
Manufacturing firms led May’s job cuts, losing 156,000 jobs. The service-sector employment fell by 120,000 jobs and construction lost 59,000, far less than the 108,000 lost in April. Business and professional services companies shed 51,000 jobs, while the financial-sector cut another 30,000.
Only 3,000 jobs were lost in leisure and hospitality, perhaps indicating that people are now more willing to spend money on vacations and non-essentials, the Journal reported.
The education and health services sectors added 44,000, jobs, after increasing 13,000 the prior month.