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Unemployment Rate Jumps as Employers Shed Jobs

ROBERT SIEGEL, host:

And now we go on to that unemployment report, which can be summed up simply as: more people are looking for work and they're having a harder time finding it. In May, the unemployment rate jumped by half a percentage point, to 5.5 percent; that's the biggest monthly increase since the mid-1980s.

And as NPR's Frank Langfitt reports, it is also a strong sign that the country could be in recession.

FRANK LANGFITT: The economy shed 49,000 jobs in May. That's the fifth month in a row the labor market has declined, but it was the spike in the unemployment rate that set off alarms. Analysts say one reason the unemployment rate rose so much is because more students went hunting for jobs than usual.

John Sylvia is chief economist at Wachovia. He says the weak economy and rising prices are pushing more students into the job market.

Dr. JOHN SYLVIA (Economist): The whole family needs money and/or the parents just can't afford the spending money that they may have given the teenagers last year or the year before, especially with gas. And when you start telling the teenager he has to pay for the gas money going to the restaurant, that adds up, and a lot of parents are saying we just don't have that kind of money.

LANGFITT: And today's report shows another troubling trend. People who have lost jobs are taking longer to find new ones. Between April and May, the number of people who had been out of work for more than half a year increased by 200,000.

John Sylvia says that's because the job market is changing, especially in areas like manufacturing. He says that back in the 1960s...

Mr. SYLVIA: The worker lost the job, but oftentimes was called back to the same position two or three months later.

LANGFITT: Today, though, improvements in technology and outsourcing have eliminated some jobs for good.

Mr. SYLVIA: Oftentimes when a manufacturing worker loses that positions, those are permanent job losses. The automobile industry is a very good example of that.

LANGFITT: But it's not just laid-off autoworkers who are struggling out there. Michael Coddle(ph) was out driving today around New Jersey looking for work.

Mr. MICHAEL CODDLE: Believe it or not, I'm working on trying to get a job as a driving instructor because I can't find anything in my field.

LANGFITT: Coddle's field is information technology. He was laid off more than a year ago. He says he's applied for 75 jobs, but competition is intense.

Mr. CODDLE: The people that I've interviewed with have told me that they are so overwhelmed with the amount of applications that they have, they've never seen such a huge amount of applications come in.

LANGFITT: Coddle received unemployment insurance from the government. It was about $720 every two weeks, but that ran out in March. So Coddle says he's turned to family.

Mr. CODDLE: Thank God for my parents, is all I can say. They've helped out financially. They've given us food, you know, and I feel bad because I'm 40 years old, my wife is 37. And I've never had a problem getting a computer job before, ever.

LANGFITT: People typically receive unemployment insurance for 26 weeks. But with more struggling to find work, Democrats in Washington are pushing to extend benefits another 13 weeks.

Andy Stettner is deputy director of the National Employment Law Project, an advocacy group for the unemployed.

Mr. ANDY STETTNER (National Employment Law Project): The job market is so hard that people just need that extra time to find work. And the economy needs the extra dollars.

LANGFITT: But so far the White House has opposed such a move. In a statement last month, when the unemployment rate still stood at just 5 percent, the administration said the current program provided enough benefits. Asked today if the White House would reconsider, a spokesman refused to speculate.

Frank Langfitt, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Frank Langfitt is NPR's London correspondent. He covers the UK and Ireland, as well as stories elsewhere in Europe.
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