Vol. 72/No. 26      June 30, 2008

Some 49,000 jobs were cut in May according to the Labor Department’s figures, which are often initially underestimated and later further adjusted. The number of job cuts reported by the government has totaled 324,000 so far this year.

The figures caught financial analysts by “surprise.” They were expecting a lower increase, in the hope that a recession “could be narrowly avoided,” said a June 6 article on CNNMoney.com. The U.S. government has not yet officially declared the economy is in a recession.

The jump in the unemployment rate, according to the Labor Department, is partly attributed to a sudden increase of 577,000 workers entering the workforce, some of whom are students looking for summer work.

Workers who have either stopped looking for work or have been looking for more than one year are not counted as part of the workforce when figuring the unemployment rate. Undocumented immigrant workers are not included in the figures either.

The number of unemployed grew by 861,000 to 8.5 million. Unemployment rate for Blacks increased to 9.7 percent. The rate for teenagers rose to 18.7 percent, the highest in five years.

General Motors announced earlier in June that it will cut by half its workforce of 2,400 at its Janesville plant by this summer. The plant is scheduled to be shut down completely by 2010, said GM representatives. Likewise, Continental Airlines executive have said the company will shed 3,000 jobs in the coming months, more than 6 percent of its workforce. United and American Airlines have also announced they will be cutting thousands more jobs.

Meanwhile, a bill that would have extended unemployment benefits by 13 weeks—the Emergency Extended Unemployment Compensation Act—was defeated in the House of Representatives on June 11.  
 
 
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