The US unemployment rate rose to a nine-year high of 6.1% in May as businesses axed 17,000 jobs, the latest government figures show, reflecting a sluggish postwar recovery with slim pickings for the jobless.
The jobless rate, the highest since July 1994, was in line with Wall Street economists' expectations. But businesses cut about half as many jobs as had been forecast.
Many of the figures underwent a sweeping series of statistical revisions, notably scaling back job losses in April from 48,000 to zero. The revisions had no impact on the unemployment rate.
Overall, the number of unemployed people rose 212,000 to nine million. Factory workers were hard hit as manufacturers cut 53,000 jobs, despite about 9,000 people returning to work at car plants after temporary shutdowns.
Losses in manufacturing amounted to nearly 2.6 million jobs since July 2000. Retailers pared 14,000 employees. Airlines shed 5,000 jobs, bringing the total losses to 113,000 since March 2001. But buoyant housing, powered by four-decade low interest rates, spurred an 26,000-strong rise in construction jobs.
The figures are the latest in a series of reports showing the US economy gingerly pulling out of a slump, with businesses thawing out from an Iraq-war inspired freeze. Manufacturing activity shrank in May, but at a slower pace than in April, a closely watched survey by the Institute for Supply Management (ISM) showed.
In a separate measure of the vast services sector, the ISM said its index of non-manufacturing activity, based on a survey, showed a modestly accelerating expansion. The US economy plodded ahead at a 1.9% growth rate in the first quarter of 2003, only a marginal improvement from the 1.4% rate of the fourth quarter of 2002.
With deflation now overshadowing inflation as a concern for the US economy, speculation has been mounting that the Federal Reserve will cut the federal funds target rate, which commercial banks charge each other for overnight loans. The key rate is already at a four-decade low of 1.25%. Federal Reserve policymakers hold their next meeting June 24-25.
