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Joblessness Hits 9.4%, but Slowing Losses Raise Hopes
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| Contributor | Scott³ |
| Last Edited | Scott³ Jun 05, 2009 11:58am |
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| Category | News |
| Media | Newspaper - New York Times |
| News Date | Friday, June 5, 2009 05:00:00 PM UTC0:0 |
| Description | New York Times
"The American economy shed another 345,000 jobs in May as the unemployment rate spiked to 9.4 percent, but the losses were far smaller than economists anticipated, amplifying hopes of recovery.
“It supports the idea that before the end of the year and maybe even by late summer we could be at flat employment,” meaning no more net job losses, said Alan D. Levenson, chief economist at T. Rowe Price in Baltimore. “During the course of next year, we’ll probably start to feel better.”
Wall Street saw some fresh signs of potential revival in the better-than-expected report from the Labor Department on Friday, and stocks moved moderately higher after some hesitation.
But many analysts emphasized that the marked slowdown in the pace of job market deterioration — while positive — did not alter the reality that the economy remains very weak, with grave challenges still bearing down on millions of households and businesses.
“These are still terrible numbers,” said Ian Shepherdson, chief United States economist at High Frequency Economics. “We’re a million miles away from a recovery.”
Rather than a sign of renewed vigor, the latest monthly snapshot of the job market suggests the end of the acute panic suffered last fall, when the investment bank Lehman Brothers collapsed and credit froze throughout much of the economy.
“That wild disgorging of inventories and workers that we saw in the aftermath of Lehman, what you’re seeing is the reversal of that dynamic,” said Robert Barbera, chief economist at the research and trading firm ITG. “You had companies throughout the world that suddenly had serious concerns about access to capital and they slashed spending and cut workers well beyond any connection to demand. There’s now a better tone to the data.” |
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