From 5.0 to 5.5 percent in one month. Wow.
But the news isn’t all bad:
The major headline from today’s report will be the spike in the unemployment rate to 5.5% in May from 5% last month. This is the largest increase in any month since 1986. There was also a 0.4 point increase in April 1995. However, it is important to note that we were not in recession in 1986 or 1995 and both spikes represented mid-cycle peaks for the unemployment rate. Some analysts will point out that the jobless rate is up 0.8 percentage points in the past six months, which has never before happened except in recessions. However, the unemployment rate is up 2.4 points among workers age 16-24 and only 0.4 points among workers age 25+. An increase of 0.4 points for those 25+ is consistent with sluggish growth, not recession. Most of the increase in the jobless rate in May itself was due to workers age 16-24, suggesting the government misjudged the seasonal adjustments needed at graduation time. Other data in the employment report paints a mixed picture of the labor market. Payrolls fell 49,000 in May and total hours worked declined 0.1%. However, the median duration of unemployment fell to 8.3 weeks from 9.3 last month while the labor force participation rate (the share of working-age people who are either working or looking for work) increased to 66.2% from 66.0%