Continued job losses in manufacturing and retail pushed the nation's unemployment rate to 6.1 percent in May - its highest level in nine years - as companies continued to slash workers from their payrolls, but at a slower pace than in previous months, the Labor Department said yesterday.
The unemployment rate, an important measure of the economy's strength, inched up from 6 percent in April, as 17,000 workers were shed from companies last month.
The job losses helped boost the total number of unemployed to 9 million, up from 8.8 million the month before.
Maryland's jobless figures, which also were released yesterday, continued to outperform the nation. Unemployment in the state dipped to 4.1 percent in April, down from 4.2 percent a year earlier and 4.4 percent in March. The numbers are not adjusted for seasonal variations and are a month behind the national figures.
"By and large, that [4.1 percent] is a great rate," said Richard P. Clinch, director of economic research at the University of Baltimore. "This is not the rate one would expect to find at the tail end of a recession."
The last time the country's unemployment rate touched 6.1 percent was in July 1994, when it was recovering from recession. Unemployment reached 6.4 percent in April 1994.
Many sectors of the labor market continued to struggle and shed workers, the report showed.
Manufacturers trimmed payrolls by 53,000 in May, although the pace slowed from the 95,000 jobs cut in April. Since July 2000, the sector has lost 2.6 million jobs.
The losses in May were widespread among manufacturers, with computers and electronics producers leading the way by cutting 16,000 workers.
Government entities across the country also cut 25,000 jobs, while retail trade lost 14,000 workers.
Some sectors added people to payrolls, such as construction employment, which hired 26,000. Professional and business services grew by 48,000 workers.
"Still, I think we have a jobless economic recovery," said Sung Won Sohn, chief economist at Wells Fargo & Co. "We are losing jobs. I continue to worry about manufacturing jobs. A lot of those jobs have gone overseas, and they are not coming back."
The search for jobs continues to be difficult, too. Nearly 2 million people have been out of work for 27 weeks. In addition, the number of people unemployed for less than 5 weeks rose to 3.1 million, up from 2.8 million in April.
"When you look at the data, there are very few bright spots in the employment picture," said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, N.C.
Nevertheless, Vitner and other economists were encouraged by several signs in the report that could mean the battered job market is mending.
The Labor Department made several major changes to the way it collects and calculates its survey data. As a result, the number of jobs lost this year through April declined from 322,000, as initially reported, to 114,000.
"At least the hemorrhaging was not quite as bad as we thought it was," said Kenneth Mayland, an economist at ClearView Economics in Pepper Pike, Ohio. "These numbers are really portraying a different picture."
Another positive was that average hourly earnings rose by 5 cents in May to $15.34, which means people have more money to spend, economists said. And the number of temporary service jobs increased by 58,000.
"This is hinting that employers may be putting a toe in the water," Mayland said. "They have enough work to bring people on, they need bodies to get things done, but they just don't have enough confidence in the economy to make the full bet."
Stocks surged on the news early in the day, but cooled off, with the Dow Jones industrial average adding 21.49 points to close at 9,062.79. The Standard & Poor's 500 stock index fell 2.38 points to 987.76, and the Nasdaq composite index, which is dominated by large technology companies, dipped 18.59 points to 1,627.42.
"By and large it is really not a bad report," said James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. "The best thing of all is just the revisions, the fact that we were not necessarily as bad off as we initially thought."
James E. Glassman, senior U.S. economist at J.P. Morgan Chase & Co. in New York, expects the job market to remain sluggish until economic growth accelerates beyond 4 percent.
The gross domestic product - the total value of goods and services produced in the country - grew at a 1.9 percent annual rate in the first quarter.
Glassman said Washington is focused on getting the economy moving, and he expects the Federal Reserve to cut interest rates when it meets June 24 and 25.
"The economy is slow, and everyone knows it," Glassman said.
Others see the Labor Department's most recent numbers as an encouraging sign that the economy is recovering.
"I think you can make a compelling case that the worst has passed and in some sense the economy has turned a corner," Mayland said.
Maryland hasn't suffered like the rest of the nation mainly because it has little manufacturing and the federal government provides stability, Clinch said.
"What has been hit nationally, we don't do," he said.
Several Maryland counties posted unemployment numbers that are sharply lower than the state's and the nation's.
Montgomery County had the lowest unemployment rate at 2.4 percent; followed by St. Mary's County, 2.6 percent; and Calvert and Howard counties, 2.7 percent.
The counties with the highest unemployment included Dorchester County, 10.2 percent; Worcester County, 8.9 percent; and Cecil County, 7.7 percent. Baltimore City's jobless rate was 7.5 percent.
Unemployment in Baltimore County was 4.4 percent; in Anne Arundel County, 3.3 percent; in Carroll County; 3.0 percent; and in Harford County, 4.3 percent.
"Across the board, these are generally speaking very good numbers here," Clinch said.
