WASHINGTON – With companies in no mood to hire, the unemployment rate jumped to 9.4 percent in May, the highest in more than 25 years. But the pace of layoffs eased, with employers cutting 345,000 jobs, the fewest since September.
The much smaller-than-expected reduction in payroll jobs, reported by the Labor Department on Friday, adds to evidence that the recession is loosening its hold on the country. It marked the fourth straight month that the pace of layoffs slowed.
“This tide is turning,” said Richard Yamarone, economist at Argus Research. “We expect this trend of slower job loss to continue throughout the year.”
Still, the increase in the nation’s unemployment rate from 8.9 percent in April underscores the difficulties that America’s 14.5 million unemployed are having in finding new jobs. Economists had expected the rate to hit 9.2 percent last month.
If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.4 percent in May, the highest on records dating to 1994.
Labor Secretary Hilda Solis called the rise in May’s unemployment rate “unacceptable” and pledged to help bring it down by aiding the unemployed get new skills or training.
President Barack Obama’s stimulus package is expected to help bolster the economy. Vice President Joe Biden said he will join Obama on Monday in seeking to ramp up the pace this summer of the stimulus effort that Congress approved earlier this year.
Even with layoffs slowing, companies will be reluctant to hire until they feel certain that economic conditions are improving and that any recovery will last.
Since the recession began in December 2007, the economy has lost a net total of 6 million jobs.
The average work week in May fell to 33.1 hours, the lowest on records dating to 1964. The number of people out of work six months or longer rose to more than 3.9 million in May, triple the amount from when the recession began.