The Labor Department Friday morning reported that May nonfarm payroll employment fell by 345,000 in May, roughly half the average monthly decline posted for each of the prior six months and well below expectations of economists for a drop of more than 500,000.
The unemployment rate, however, jumped to 9.4% from 8.9%, presenting evidence that even if the recession is slowing, the damage it has done to the job market will likely linger.
That means 14.5 million people are out of work, and another 2.2 million are "marginally attached to the labor force," meaning they had given up searching for jobs during the past four weeks, and thus were not counted as unemployed. Coupled with people forced into part-time jobs by loss of full-time employment, the rate tops 16%.
Manufacturing was the hardest hit sector, shedding 156,000 jobs, much of that related to the auto and supporting industries. Job losses in construction, which have been averaging 117,000 for the past six months, slowed to 59,000. Still, the unemployment rate for the construction category was 19.2%, not seasonally adjusted, meaning 1.77 million construction workers were unemployed.
Unemployment rates are highest among those with lesser education and skill, with the rate for those with less than a high-school diploma rising to 15.5% for 14.8% in April and for high-school graduates to 10% from 9.3% in April. The rate for workers with some college rose to 7.7% from 7.4% and for college grads and above from 4.4% to 4.8%.
The report was greeting with a rally in stocks at market open, with the Dow up 0.73%, the S&P up 0.91% and the NASDAQ up 0.81% in the first ten minutes of regular trading.