The Bureau of Labor Statistics announced today that the unemployment rate rose to 9.4% in May and job losses totaled 345,000. This was about half the loss rate of recent months and well below expectations. A number of commentators hailed it as a sign that the recession is abating. The pace of economic deterioration is certainly slowing, but we are not out of the woods. This month’s unemployment report is no cause for celebration.
The total number of unemployed hit an all-time high of 14.5 million people, an increase of 3.4 million just since the end of last year. And nearly half have been out of work for 15 weeks or more. The employment participation ratio—that is, the number of employed people as a percentage of the civilian workforce—dropped to 59.7%, the lowest percentage since 1984. Manufacturing lost another 156,000 jobs, and this is before the Chrysler and GM plant shutdowns. Since the recession began, almost 1.8 million manufacturing jobs have been lost, and the unemployment rate in this sector is 12.6%. Construction employment has been falling since February 2007. Over 1.4 million construction jobs have been lost, and the construction unemployment rate is a Depression-like 19.2%. Maybe one reason that job losses were less than expected is simply that there aren’t that many more jobs to lose.
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