Employers in the U.S. shed far fewer jobs than expected in May, suggesting that the worst of the nation's monthly payroll losses could be over.
The Labor Department said Friday that 345,000 jobs were eliminated last month, well below estimates for around 520,000.
Still, the labor market has a long way to go before a recovery can be called, considering that the unemployment rate rose to 9.4% from 8.9% in April. That's the highest unemployment rate in 25 years. Analysts were expecting an unemployment rate of 9.2%. Also, since the recession started in December 2007, roughly 6 million people have been dropped from nonfarm payrolls.
The number of unemployed, of course, is actually far larger. The Labor Department said that the group of "marginally attached" workers swelled to 2.2 million this month, up 794,000 from last year. Marginally attached are those who attempted to find work some time in the last 12 months, but did not count as unemployed because they did not search for work in the four weeks before the survey was done. Of those, there were 792,000 discouraged workers, or those just not looking because they feel jobs are scarce for them.
When adding in the number of people who have given up looking for work, or who have settled for part-time work, the total unemployment rate would have hit 16.4%. That would be the highest since 1994.
The employment report consists of two surveys. The household survey produces the unemployment rate by using a pool of 60,000 households. The establishment survey asks questions to 375,000 businesses and produces more industry based statistics and average workweek figures.
Losses were felt across the board. The nation now has 14.5 million persons unemployed, an increase of 787,000. Long-term unemployed, or those who have been jobless for at least 27 weeks, tripled since the start of the recession, increasing another 268,000 to 3.9 million in May.
Rates rose for both men and women to 9.8% from 9.4%, and 7.5% from 7.1% respectively.
According to the establishment survey, unsurprisingly, manufacturing saw one of the starkest sector declines. Jobs fell by 156,000 in that sector, with auto industry cuts and machinery being the primary culprits.
Second on the list was construction cuts, though many those job losses appeared to have tapered off slightly. Employment there decreased only 59,000, compared to an average monthly loss of 117,000 for the last six months. Losses in professional and business services also slowed a bit, losing 51,000 jobs this month as compared to an average of 136,000 jobs per month in the last 6 months.
Still, health care added 24,000 jobs in May.
Average workweek numbers dropped 0.1 hours to 33.1 hours, while the manufacturing workweek decreased 0.2 hours to 39.3 hours. Typically, an hourly increase at the beginning of a business cycle is a good indicator that employers may prepare to increase payrolls to meet demand.
Another surprise came from the March and April figures, which were revised higher to show that 82,000 fewer employees than originally reported lost their positions in those two months.
Stock index futures were higher ahead of the data and they rose further following the numbers.
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