U.S. Unemployment Up to 5.6%--Second Rise in 20 Months
The nation’s unemployment rate rose to 5.6% in May--only its second increase in 20 months--as 518,000 fewer Americans were at work than in the previous month, the government said today.
The 0.2-percentage-point increase from a 14-year-low jobless rate of 5.4% was accompanied by an increase of 173,000 in the number of people listed by the Labor Department as unemployed. The department said the labor force, those either holding jobs or actively looking for them, shrank 363,000 to 122.7 million.
(California’s unemployment rate jumped more than a full percentage point to 6.3% in May as the number of job-holders declined by 111,000, labor officials reported today. The increase surprised analysts who have recorded the state’s jobless rate hovering well below that mark for several months.)
The figures are based on a monthly survey of the nation’s households. The rate is seasonally adjusted to discount for periodic, predictable influences on the calculations.
A separate survey of employer payrolls showed the national economy creating 210,000 jobs in May, but that was down from an average job growth over the last year of 250,000 a month.
Most in Service Area
“Almost all of the payroll job increase took place in the service-producing sector,” said Janet L. Norwood, commissioner of labor statistics.
Norwood told the congressional Joint Economic Committee that job growth in business services, which has accounted for one in eight new jobs over the six-year economic expansion, has slowed to an average of 15,000 in each of the last three months, contrasted with an average monthly gain of 35,000-40,000 in 1987.
Manufacturing employment grew only 16,000 in May after a 45,000-job gain in April. Construction employment fell 16,000 after a rise of 157,000 from January through April.
The 0.2-percentage-point drop in April’s jobless rate had been propelled largely by assembly-line hiring as manufacturers tried to keep with the surging foreign demand for American products.
‘No Real Change’
Norwood called May’s 16,000 new factory jobs “no real change.” But she said both the machinery and metal products industries registered job growth over the month.
“The two export-influenced industries have paced the gains in manufacturing over the last year, along with electrical equipment, printing and publishing, chemicals and rubber and plastic products.”
Meanwhile, employment in finance, insurance and real estate fell by 10,000 after a 2,000-job drop in April.
The financial industry, which includes banks and brokerages, had been one of the strongest areas of job growth through much of the recovery, but has lost a total of 10,000 jobs since January.
