The U.S. unemployment rate increased to 5.5 percent in May, up from 5 percent the previous month, and the economy lost 49,000 jobs. Looking at the history of U.S. unemployment rates, this was the biggest monthly increase in 22 years and it triggered concerns the economy was at greater risk of edging into recession. The history of U.S. unemployment rates also shows that the 5.5 percent figure is the highest since October 2004.
Experts anticipate another several months of job losses as employers show more reluctance to hire, but many also say some bright spots remain, and job losses are relatively modest when compared with the millions of jobs added during the economic upturn. Beyond all this talk of the history of U.S. unemployment rates and job losses, what’s really going on?
It’s helpful to keep a few points in mind. The uptick in the unemployment rate doesn’t only reflect more workers losing their jobs; it also shows a rise in new and returning workers. Simply put, it’s almost summer, which means scores of younger workers hunting for summer jobs. The Bureau of Labor Statistics typically warns against reading too much into one month’s jobs data, and today they urged even more caution, given the season. It’s also important to understand how the data is collected. The unemployment rate and the number of jobs added or lost each month are based on separate surveys, so the rate can rise or fall disproportionately with respect to the change in the number of workers on payrolls.
And, as experts are demonstrating with their varied opinions, narrowing in on exactly what the latest numbers mean is nearly impossible. It’s likely we won’t know the full impact of these numbers for some time.
History of U.S. Unemployment Rates and Jobless Benefits
Among the 8.6 million unemployed in May, 1.6 million were unemployed 27 weeks or longer. Federal unemployment benefits now expire after 26 weeks, but a bill approved by the U.S. Senate and facing a vote in the House would add another 13 weeks of cash assistance. The Bush administration says jobless benefits have never been extended with the unemployment rate as low as it currently is.
The debate over unemployment benefits will likely escalate–or stagnate. President Bush has voiced his displeasure with the measure approved by the Senate. If there’s no movement in the House by early August, when Congress is expected to take its summer hiatus, the situation might stall for the rest of the year, as the November elections overshadow all else.
Readers, should the White House back an extension of jobless benefits?
- BLS Deputy Commissioner’s statement to Congress
- Jobless rate leaps to 3-1/2 year high in May (Reuters)
- Graphics on the History of U.S. Unemployment Rates (Reuters)
- Unemployment Rate Hits 5.5% as 49,000 Jobs Lost (The New York Times)
- Job Losses and Oil Surge Spread Economic Gloom (The New York Times)
- Jobs recovery at least 6 months away (Reuters)
- Economists React: ‘Teen Angst’ or Playing ‘Catch-Up’ in Jobless Rate? (Real Time Economics)
- Behind the Unemployment Rate Jump (Odd Numbers)