The US unemployment rate edged up to a 25-year high of 9.4% last month as employers shed 345,000 jobs, although economist took comfort in signs that the rate of erosion in the workforce slowed down sharply.
Non-farm payroll figures released by the US commerce department revealed that the headline rate of unemployment rose by half a percentage point from April's figure of 8.9%.
However, the number of jobs disappearing from the economy was the lowest since September. Job losses significantly dropped in comparison with revised figures of 652,000 and 504,000 for March and April.
"Good news at last," said Kurt Karl, the chief US economist at Swiss Re in New York. "At some point, we had to start moving to the 300,000 range; after all, we already laid off an incredible amount of people."
Since the economic slump began at the end of 2007, the US has lost more than 6m jobs. But the slowdown in job losses is likely to provide succour for those who believe "green shoots" are beginning to emerge on the financial landscape.
In construction, job losses of 59,000 in May were considerably lower than the 108,000 positions shed in April; in the service sector, about 120,000 positions disappeared compared with 230,000 the previous month.
Nigel Gault, the chief US economist at IHS Global Insight, said: "The message is: the most extreme phase of hiring cuts in capital spending, that's now behind us. Firms were very quick to react to the downturn in the economy."
Experts remain concerned about the likely impact of woes in the Detroit carmaking industry on employment over the coming months. General Motors and Chrysler have filed for bankruptcy and are idling many of their vehicle plants.
Yet a cautious mood of optimism has powered Wall Street upwards, with the Dow Jones industrial average up by 27% since early March. Activity has increased in the battered housing market and there are signs that credit crunch has begun to thaw, with banks proving more willing to lend money.
No comments:
Post a Comment