Job Losses in the U.S. Slow

The U.S. lost fewer jobs in May than forecast, even as the unemployment rate surged to 9.4% because more people joined the labor force, reinforcing signs the recession is starting to abate.

Payrolls fell by 345,000, the smallest decrease in eight months, after a revised 504,000 loss in April, the Labor Department said today in Washington. The jobless rate increased to 9.4 percent, the highest since 1983.

A deceleration in firings, combined with stabilization in housing and manufacturing, signal the economic slump is easing. Still, Americans are spending less and saving more as home values fall and companies from American Express Co. to General Motors Corp. pare jobs, meaning any expansion may be muted.

Revisions added 82,000 from payroll figures previously reported for April and March.

The world's largest economy has lost 6 million jobs since the recession began in December 2007, exacerbating the biggest drop in any post-World War II economic slump.

Today's report showed factory payrolls fell by 156,000 after decreasing 154,000 in the prior month. Economists forecast a drop of 150,000. The decline included a drop of 29,800 jobs in auto manufacturing and parts industries.

Payrolls at builders fell 59,000 after decreasing 108,000. Financial firms cut payrolls by 30,000, after a 45,000 drop the prior month.

Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 120,000 workers after reducing 230,000. Retail payrolls decreased by 17,500 after a 36,500 reduction.

Government payrolls declined by 7,000 after rising 92,000 the prior month.

Today's report also showed the average work week shrank to 33.1 hours from 33.2 hours in April. Average weekly hours worked by production workers slipped to 39.3 hours from 39.5 hours, while overtime held at 2.7 hours for a second month. That brought the average weekly earnings down to $613.67 from $614.86.

Workers' average hourly wages rose 2 cents, or 0.1 percent, to $18.54 from the prior month. Hourly earnings were 3.1 percent higher than May 2008, the smallest gain since November 2005.

Job Losses in the U.S. Slow, Bloomberg
6/5/2009 8:39:26 AM