Jobless rate hits 9.4% in May, but layoffs slow

With companies in no mood to hire, the unemployment rate jumped to 9.4% in May, the highest in more than 25 years. But the pace of layoffs eased, with employers cutting 345,000 jobs, the fewest since September. The much smaller-than-expected reduction in payroll jobs, reported by the Labor Department today, adds to evidence that the recession is loosening its hold on the country. It marked the fourth straight month that the pace of layoffs slowed. The increase in the nation’s unemployment rate from 8.9% in April underscores the difficulties that America’s 14.5 million unemployed are having in finding new jobs. Economists had expected the rate to hit 9.2% last month. If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.4% in May, the highest on records dating to 1994. Even with layoffs slowing, companies will be reluctant to hire until they feel certain that economic conditions are improving and that any recovery will last.