Jobless Rate Posts Biggest Jump in 22 Years

Signs are very bad for consumers
By Kevin Spak,  Newser Staff
Posted Jun 6, 2008 8:43 AM CDT
A for lease sign is posted at an industrial office site located across from a General Motors sport utility plant. GM announced that the plant will close by 2010, resulting in a loss of 2,500 jobs.   (AP Photo/Al Behrman)
camera-icon View 1 more image

(Newser) – Unemployment saw its biggest leap in two decades in May, spiking from 5.0% to 5.5%, as companies scale back their workforces in the face of recession, Bloomberg reports. Analysts had expected a more modest climb, to 5.1%; unemployment hasn’t been this high since October 2004. Payrolls also fell by 49,000.

The US has lost jobs for 5 straight months, as companies try to protect profits against rising commodity costs. “We’ve never seen a run of negative payroll numbers like this without the economy being in recession,” said one economist. The data makes it unlikely that the Fed will raise rates this fall, as many analysts have been predicting.