Christian Science Monitor: The job market's big slump (United States is now in a jobs recession)

[Omaha Steve]

http://www.csmonitor.com/2008/0609/p01s03-usec.html

The month of May had the sharpest increase in the US unemployment rate in 22 years.
By Ron Scherer | Staff writer of The Christian Science Monitor

from the June 9, 2008 edition


Looking for work: Chicago resident Kathy Henry (l.) was laid off from an advertising company last August. In February, the mother of three children saw her unemployment benefits run out.
Stephen J. Carrera/Special to The Christian Science Monitor

New York - The United States is now in a jobs recession.

For five consecutive months, there has been a steady loss of jobs, mostly in construction and manufacturing. Now, the job losses are spreading to restaurants, retailers, airlines, and even professions such as accounting. Teens are having an especially tough time finding work this summer.

The lack of hiring and increase in firing have wide ramifications for the US. The job losses will probably intensify the debate in the presidential campaign over who can best stimulate the economy. With more of their constituents out of work, members of Congress may act to provide additional aid to the unemployed. And a higher rate of unemployment – it hit 5.5 percent in May – may put additional pressure on the Federal Reserve, which has indicated it may have stopped lowering interest rates for now.

Last Friday, as the price of oil soared, Wall Street reacted badly, with the Dow Jones Industrial Average falling 394.64 points.

"The economy is now literally at stall speed," says Bob Gay of Fenwick Advisers in Rye, N.Y. "When the economy is operating at its potential, we can create about 100,000 jobs a month. But now, we are losing about 50,000 jobs a month."

The latest evidence of job slippage came on Friday, when the Department of Labor reported that the unemployment rate moved up 0.5 percent in May from April – the sharpest increase in the rate in 22 years. At the same time, the payroll survey found a net loss of 49,000 jobs, which means the economy has lost about 300,000 jobs so far this year.

The latest numbers may have been somewhat swayed by a large increase in the number of teenagers looking for work. Last month, the labor force increased by 577,000, including 261,000 who were between 16 and 19 years of age.

FULL 2 page story at link.