Published June 6, 2009

Latest US Data

US jobless rate at 25-yr high but layoffs easing

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(Washington)

WITH companies in no mood to hire, the US unemployment rate jumped to 9.4 per cent last month, 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 yesterday, 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.

Still, the increase in the nation's unemployment rate from 8.9 per cent 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 per cent 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 per cent in May, the highest on records dating to 1994.

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 six million jobs.

As the recession bites into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive the fallout. Those include holding down workers' hours and freezing or cutting pay.

The average work week last month fell to 33.1 hours, the lowest on records dating to 1964.

Job losses - while slower in May - were still widespread.

Still, in another encouraging note, job losses in both March and April were less than previously thought. Employers cut 652,000 positions in March, versus 699,000 previously reported. They eliminated 504,000 jobs in April, less than the 539,000 initially estimated.

Federal Reserve chairman Ben Bernanke repeated his prediction this week that the recession will end this year, but that any recovery will be gradual. -- AP