WASHINGTON — The nation's breathtaking pace of job loss slowed significantly in May, bolstering hopes that the worst of the recession is over. But millions of Americans and their families face continued economic pain with the unemployment rate jumping to 9.4%.
The contrasting trends underscore a painful economic reality: Even as the recession winds down, hundreds of thousands of workers may continue to lose their jobs -- and the unemployed may be among the last to reap the benefits of recovery.
The Labor Department reported Friday that the U.S. economy shed 345,000 jobs in May, bringing the total number of jobs lost in the recession to 6 million. The unemployment rate rose to the highest level since 1983, a full one-half percentage point above the 8.9% in April.
Normally, losing more than 300,000 jobs in one month and seeing the jobless rate near 10% would be cause for alarm. But May's job losses are the lowest since September and were only half the average monthly losses in the last six months.
In the present climate, that is seen as the latest in a series of signs that the economy is beginning to turn around. Home sales are up. Consumer confidence is improving. The stock market has rebounded since hitting a 12-year low in March.
"The pace of the recession finally seems to be slowing," said Andrew Stettner, deputy director of the National Employment Law Project. "But with the unemployment rate climbing, it should be abundantly clear that the job market is in a hole that could take years to climb out of."
Labor Secretary Hilda Solis said dislocated workers historically have had a hard time getting back into the workforce.
"It's not going to turn around as quick as you and I would like to see it," Solis said in an interview to be aired Sunday on C-SPAN.
Wages remained essentially flat last month, the government reported. And providing further evidence of uncertainty about the future, the Federal Reserve Board reported Friday that consumer borrowing dropped by $15.7 billion in April -- one of the biggest monthly drops ever in dollar terms.
The decline suggests that even though confidence may be up, consumers remain wary of major new spending. That raises a caution flag about the speed with which a recovery may develop. Consumer spending accounts for about 70% of the nation's gross domestic product.
