Unemployment at 5.5% and the Reluctant American Employer

Jun 6, 2008
This article is part of a series called News & Trends.

American companies are reluctant to hire, and the proof is in the Bureau of Labor Statistics new report, released early Friday morning. Here are some glimpses from the economic report, broken down into digestible nuggets:

Recession is real. Mark Zandi, chief economist at Moody’s, says there is “no debate that the economy is in a recession.” Among other worries for the average American, beyond a lower net worth and smaller purchasing power, Zandi says it is tough to find a job, and “if you lose a job, it is tough to get back in.”

Jobless jump. The new BLS report shows that May’s jobless rate jumped to 5.5% from 5%, a sounding bell that U.S. growth is stalling.

Job losses. Since the beginning of 2008, job losses have totaled 324,000.

Optimistic pessimism. The 49,000 loss is actually smaller than initially forecast, after a 28,000 drop in April that was more than initially reported.

Who is hit. So who represents that 5.5%? The pain is sparing no one, with adult men, adult women, teens, whites, and blacks equally affected. Of note, among the 8.5 million unemployed Americans, the largest segment is among 16- to 24-year-olds.

The ADP report. According to a report from ADP Employer Services, U.S. companies unexpectedly added 40,000 jobs in May, the most since January. The ADP report doesn’t include government jobs, and the report tends to over-inflate private employment data.

Healthcare still hot. In the healthcare sector, 34,000 new jobs were added in May.

Construction not hot. Employment in construction, meanwhile, declined by 34,000. The BLS says that, since its peak in September 2006, construction employment has fallen by 475,000; two-thirds of that decrease, or 320,000, has occurred in just the past seven months.

A maybe on manufacturing. Among manufacturing jobs, employment declined in May by 26,000 jobs. Declines continued in two construction-related manufacturing industries — wood products and nonmetallic mineral products.

Retail cuts. Retail trade employment in department stores and similar declined by 27,000 in May. Since peaking in March 2007, the industry has lost 184,000 jobs, says the BLS.

Temp help. Temporary help services shed 30,000 jobs in May, with a total of 110,000 job losses over the past four months.

This article is part of a series called News & Trends.
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