Jobless rate at 9.4%, but pace easing off

Aneika Ferman, 22, won't graduate from Drexel University until next week, but entered the job market months ago. I put myself out there, said Ferman, a marketing major.
Aneika Ferman, 22, won't graduate from Drexel University until next week, but entered the job market months ago. I put myself out there, said Ferman, a marketing major. (Roslyn Rudolph)
Posted: June 05, 2009

The nation's unemployment rate rose to 9.4 percent in May, the highest in more than 25 years. Yet, there is evidence that the recession is loosening its grip - employers cut 345,000 jobs, the fewest since September, the Labor Department reported.

You can blame new college graduates like Aneika Fermin, 22, for the unemployment rate.

Even though Fermin will officially join the labor force after she graduates next week, she's been looking for a job for months.

"I put myself out there," said Fermin, a marketing major at Drexel University.

Fellow members of the class of 2009, available for work after their graduations in May, have already swelled the labor force and because many of them haven't found work, they are now among 14.5 million unemployed Americans, up from 13.7 million in April.

The increase in the number of unemployed has outstripped the increase in the labor force, hence the rise in the unemployment rate to 9.4 percent.

It'll be a tough road for Fermin and her fellow graduates. Unemployment among young workers age 20 to 24 was 15 percent in May as 2,265,000 of them can't find work. Among college graduates, unemployment has reached 4.8 percent - a year ago it was 2.3 percent.

Experts say the economy must grow by 150,000 jobs a month to accommodate Fermin and her classmates.

The decline in layoffs was smaller than expected - with economists predicting an increase of more than a half million jobs lost from April to May.

"This tide is turning," said Richard Yamarone, economist at Argus. "We expect this trend of slower job loss to continue throughout the year."

As has been usual, job cuts have spread across the entire spectrum, with education, health services and leisure and hospitality reporting modest gains.

Focusing in, bars and restaurants continued to hire, pulling up the entire leisure and hospitality sector. Meanwhile, 10,300 were lost in gambling, amusements and recreation.

There's no sign, so far, that the stimulus has made a dent in construction hiring. Heavy and civil engineer construction - the people that build bridges, roads and other infrastructure - continued to lose jobs, down 8,700. Even as construction should be picking up because of the weather, construction payrolls declined by 12,700 jobs. Architecture and engineering also shed 14,400 jobs.

Manufacturing continued its downward slide, losing 156,000 jobs. Included in those are 29,800 jobs lost as the automotive industry collapses.

On the service side, the steepest losses, 51,000 jobs, came in the category of business and professional services - the exact sector that might employ someone like Fermin. In that category, accounting added jobs, as did waste management, demonstrating that the recession can not halt either trash or taxes.

Since the recession began in December 2007, the economy has lost a net total of 6 million jobs.

As the recession - which is now the longest since World War II - 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 in May fell to 33.1 hours, the lowest on records dating to 1964.

The state of New Jersey, for example, announced earlier this week that it would cut workers' hours and pay - at least temporarily. Throughout the nation, hiring by state governments has been flat, with job growth in education offsetting declines in other government hiring.

Since the recession began in December 2007, the economy has lost a net total of 6 million jobs.

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 percent in May, the highest on records dating to 1994.

And the average length of unemployment continued to rise, up to 22.5 weeks from 21.4 weeks in April and 16.8 weeks a year ago. The percentage of workers unemployed for 27 weeks or more fell slightly to 27 percent from 27.2 percent. A year ago, only 18.4 workers were jobless that long.

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.

The deepest job cuts of the recession came in January, when 741,000 jobs disappeared, the most since 1949.

Federal Reserve Chairman Ben Bernanke repeated his prediction this week that the recession would end this year, but again warned that any recovery would be gradual.

Many economists believe that the jobless rate will hit 10 percent by the end of this year. Some think it could rise as high as 10.7 percent by the second quarter of next year before it starts to make a slow descent. The post-World War II high was 10.8 percent at the end of 1982.


Contact staff writer Jane M. Von Bergen at 215-854-2769 or jvonbergen@phillynews.com.

This article contains information from the Associated Press.

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