The American economy lost more jobs last month pushing the unemployment rate to a level not seen since October 2004, underlining the risk of recession facing the United States. Payrolls fell by 49,000 in May – that is less than had been forecast – but it is the fifth monthly fall on the trot. Some analysts says there are bound to be more job losses to come.
The total now stands at 5.5 per cent, but beyond the simple statistic, economists point to the speed of the increase. It is the fastest rate of climb since February 1986 and the days of Ronald Reagan, more than 22 years ago.
So far this year 324,000 jobs have disappeared. In comparison. last year, the economy generated 91,000 jobs per month on average. There are those who say they have never seen such a run of negative employment figures without the economy being in recession. The numbers will also have a knock-on effect on consumer spending, which has already slowed to a snail’s pace.
The dollar fell in value on the foreign exchanges after the news, yet another headache for the Federal Reserve and its chairman Ben Bernanke, who earlier in the week linked the currency’s weakness to inflation.