Unemployment rate rises to 9.1%
As has been speculated, the unemployment numbers for May show a slowing job market and an unemployment rate that has increased to 9.1%; according to figures released this morning by the Bureau of Labor Statistics:
The U.S. economy may be in for a prolonged period of soft growth as employers hired the fewest number of workers in eight months in May and the unemployment rate rose to 9.1 percent.
Nonfarm payrolls increased 54,000 last month, the Labor Department said, fewer than the most pessimistic forecast in the Reuters survey and just over a third of what economists had expected.
The employment report which showed broad weakness confirmed the loss of momentum in the economy already flagged by other data from consumer spending to manufacturing, and stoked fears the economy could be facing a more troubling stretch of weakness than had been thought.
“There are plenty of reasons to expect the third quarter will be better. But the question is now becoming how much better?,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.
Economists had pinned the economy’s sluggishness largely on high energy prices, supply chain disruptions stemming from Japan’s earthquake and tornadoes and flooding in the U.S. Midwest and South. The department said it found “no clear impact” from weather on the jobs figures.
The private sector, which has shouldered the burden of job creation added just 83,000 jobs, the least since last June, while government payrolls dropped 29,000.
Adding to the gloomy labor market picture, about 39,000 fewer jobs were created in March and April than previously estimated.
Payrolls had been expected to rise 150,000, with private employment gaining 175,000.
It’s worth nothing that the unemployment rate is 2.5 points higher than the Obama Administration claimed it would be with the stimulus. And perhaps the most concerning aspect to the economy is the average number of weeks workers spend. It’s been stated before, but here is a chart from Business Insider that puts it in perspective (click to enlarge):