Jobless rate at highest level in 9 years

Leigh Strope

Friday, June 6, 2003 | 10:11 a.m.

WASHINGTON -- The nation's unemployment rate climbed to 6.1 percent in May, the highest level in nine years, as businesses cut 17,000 jobs in a weak economy struggling toward recovery.

The rate was up one-tenth of a percentage point from April, peaking at a level not seen since the country was emerging from the last recession, the Labor Department reported today.

July 1994 was the last time the jobless rate was at 6.1. It was higher only in April 1994, at 6.4 percent.

One reason for last month's increase was that more people resumed their job searches, but failed to find work. Nearly 9 million people were unemployed in May.

Payrolls fell by 17,000 in May following a revision in April, in which no jobs were lost. Those revisions are made annually, and the results showed that job losses were not nearly as steep as previously reported. The government also changed how it calculates payrolls data and expanded job categories.

Industries driving the job losses last month were manufacturing, transportation and government.

Some sectors did gain jobs in May. Employment rose in construction and in service jobs, including education and health services.

Another positive sign in the report was the hiring increase of 58,000 at temporary employment firms. Economists closely watch that industry because it can signal if companies may begin to hire permanent, full-time workers.

But even if the economy improves later this year, as economists hope, the jobless rate still is expected to climb to as high as 6.5 percent.

Job growth probably won't be strong enough to accommodate all the additional job seekers.