WASHINGTON - The nation's unemployment rate jumped to 5.5 percent in May - the biggest monthly rise since 1986 - as nervous employers cut 49,000 jobs.
The latest snapshot of business conditions showed a deeply troubled economy, with job opportunities dwindling in a time of continuing hardship in the housing, credit and financial sectors.
Locally, in Burlington County, 1,000 truck drivers at Delanco-based Jevic Transportation Inc. lost their jobs and their health insurance within a matter of hours when Jevic, long a transportation leader, abruptly shut its doors May 19.
About 55 newspaper staffers in New Jersey lost their jobs as their parent corporation, Gannett Co. Inc., laid off employees - after offering buyouts to 165 others.
Pharmaceutical companies, large and small, also trimmed or announced plans to cut their workforces. Merck & Co. announced it would cut 1,200 sales jobs, but would not specify how many would be lost at its pharmaceutical and sales marketing headquarters in Upper Gwynedd Township. And tiny Genaera Corp., of Plymouth Meeting, said it would lay off a third of its workforce.
Nationally, with employers worried about a sharp slowdown and their own prospects, they clamped down on hiring in May, today's report from the Labor Department said. The unemployment rate soared from 5 percent in April to 5.5 percent in May. That was the biggest one-month jump in the rate since February 1986.
The increase left the jobless rate at its highest since October 2004.
Meanwhile, inventories at U.S. wholesalers rose more than forecast in April, led by a surge in petroleum and metals that reflected rising commodity prices, Bloomberg News reported.
The 1.3 percent gain in stockpiles followed a revised increase of 0.1 percent in March, the Commerce Department said today in Washington, Bloomberg reported, adding that sales jumped 1.4 percent after climbing 1.8 percent in March.
Distributors had enough goods on hand to last 1.09 months at the current sales pace, down from the prior month and matching a record low reached in November, Bloomberg said. The decline indicates companies may be in a good position to deal with a slowing economy, a sign production cutbacks may be gradual rather than severe, Bloomberg reported.
The big jump in the unemployment rate surprised economists who were forecasting a tick-up to 5.1 percent. Payroll losses, however, weren't as deep as the 60,000 that analysts were bracing for. Still, job losses in both March and April turned out to be larger than the government previously reported. Employers now have cut payrolls for five straight months.
The 5.5 percent rate is relatively moderate judged by historical standards. Yet, there was no question that employers last month sharply cut jobs in manufacturing, construction, retailing and professional and businesses services. Those losses swamped gains elsewhere, including in the education and health fields, government and leisure and hospitality.
The government said the number of unemployed people grew by 861,000 in May - rising to 8.5 million. The over-the-month jump in unemployment reflected more workers losing their jobs as well as an increase in those coming into the job market to look for work, the Bureau of Labor Statistics said.
A year ago, the number of unemployed stood at 6.9 million and the jobless rate was 4.5 percent.
A trio of crises - housing, credit and financial - have rocked the economy. That's caused economic growth to slow to a crawl as businesses and consumers have tightened their belts. Spiraling energy costs are another negative force.
The country's economic problems are a top concern for voters - and thus for President Bush, lawmakers on Capitol Hill and those vying to win the White House this fall.