Jobless Rate Jumps to 5.5%

Well, for those wondering whether the U.S. will enter a recession or not, this is not good news.

WASHINGTON (AP) — 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.

[…]

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

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

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

— Job losses for the year reached 324,000.

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

[…]

Economists believe the 5.5 percent nationwide unemployment rate may overstate the weakness in the job market. But they still say it’s heading higher. Some predict it will hit 6 percent or higher early next year.

“Employers are uncertain about where the economy is going, so they are more cautious than they would normally be in pulling the hiring trigger,” said Tig Gilliam, chief executive officer of Adecco North America, a placement and recruiting firm.

Of course, it doesn’t mean the economy is in recession or has to go into recession. Still, bad news that sent the Dow plunging 400 points, and induced the White House to issue a statement that the President is considering new measures to revive the economy.

FILED UNDER: Economics and Business
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. Bithead says:

    It all comes down to the price of oil
    Can we start drilling now, please?

  2. Grewgills says:

    the President is considering new measures to revive the economy.

    My prediction, a tax cut possibly on capital gains.

  3. Steve Plunk says:

    Bit is right. The price of oil did more damage than the unemployment rate. When will our congress take this issue seriously? It’s bad enough they pass worthless laws but when we need something done they do nothing.

  4. fredw says:

    Where I live there were a large number of ( probably illegal alien ) day laborors on a number of street corners. Their work opportunities and their numbers are way down. Construction jobs here are almost exclusively ( possibly illegal) aliens. Those jobs are vanishing. These people send money home, but they also spend money here and add to the local economy.

    Regardless of your stand on illegal immigrants, they are an economic factor and should have been accounted for on the way up and on the way down. Do these people and their jobs show up on the unemployment stats?

  5. Bithead says:

    Bit is right. The price of oil did more damage than the unemployment rate. When will our congress take this issue seriously? It’s bad enough they pass worthless laws but when we need something done they do nothing.

    Steve;

    Actually noting would be preferable to what they want to do. Witness the comments from Cantrell the other day:

    Sen. Maria Cantwell (D-Wash.) suggested that oil companies may be manipulating energy markets as Enron did in 2001, and that the Federal Energy Regulatory Commission and the Federal Trade Commission needed to more aggressively regulate all futures markets

    Less than 24 hours later, the price goes up by 11 bucks a barrel. The connection seems obvious.

    The price jump yesterday can be traced directly to the attitudes and policies of the Democrats in Congress. The comments of Cantwell and others, show clearly that Congress is not ready to do what needs be done, and that thereby inaction would be better than the action proposed.

    Given the chance, these idiots will continue down the path of trying to regulate their way out of the situation, rather than simply get out of the way, which is in reality the only way out. The controls being applied by Congress are working in the favor of those who are causing the price spikes. Congress announcing it plans to do more of the same, made things worse… much worse.

  6. Bithead says:

    And by the way, Steve, perhaps I shuld clarify somewhat; I’m suggesting that the unemployment figures are being driven by oil prices. Consider the hit ourism related industries are going to take, and auto makers, and sales people.

  7. Arcs says:

    Regardless of your stand on illegal immigrants, they are an economic factor and should have been accounted for on the way up and on the way down. Do these people and their jobs show up on the unemployment stats?

    Illegals? I don’t think so, but students on summer break probably do.

  8. Michael says:

    It all comes down to the price of oil
    Can we start drilling now, please?

    Only if you can show that the current situation should be forcibly changed, and that additional drilling is the most efficient way do that.

  9. Bithead says:

    Forcibly changed?

    I submit to you that the application of force was when drilling where the oil is was forbiden.

    The removal of government force is what I’m calling for.

  10. Michael says:

    I submit to you that the application of force was when drilling where the oil is was forbiden.

    The removal of government force is what I’m calling for.

    I submit back to you that changing the dynamics of a system in order to effect a change in that system, is by definition forcing the change. So we are both right, a change was forced when drilling was blocked, and another change would be forced by opening it up again.

    My only question is whether that force is necessary to effect the desired change, and if the change is even something we should be trying to effect in the first place.

  11. Bithead says:

    The removal of conrtol-by-force is returnng things to their natural state. No force is needed in terms of forcing the market to do anything. If foce is needed anywhere it is to repel the governmental interlopers.

  12. Michael says:

    The removal of conrtol-by-force is returnng things to their natural state.

    There’s no such thing as a “natural” state for an economy or market, only a state that is, and states that can be.

    No force is needed in terms of forcing the market to do anything.

    I’m using force to mean any action that effects a reaction in the market (positive or negative), where you seem to by using to to mean “An attribute that prevents the market from moving in a particular direction that it would naturally want to move towards in the absence of said attribute”, am I reading you right?

    If foce is needed anywhere it is to repel the governmental interlopers.

    That is the force I’m referring to in questioning whether or not it is “needed” as you imply. I’m not taking a stance on whether a force is “good” or “bad” by it’s nature, therefore the “need” to use a force must to be shown by it’s ability to produce a specific change, and whether or not that change is necessary.