Job losses moderate in May.  The Bureau of Labor Statistics (BLS) reported that total nonfarm payrolls in May declined by 345,000 jobs, about half of the average monthly decline of the previous six months.  Additionally, losses reported previously for April and March were revised upward by 35,000 and 47,000 jobs, respectively.  Since the start of the recession, total nonfarm payrolls have declined by 6 million.  Job losses continued to be widespread throughout the economy, with continuing declines in the manufacturing   (-156,000), construction (-59,000), financial (-30,000) and retail trade (-17,500) sectors.   While job losses in the goods-producing sector were smaller than in previous months, declines in the private services sector had moderated even further.  Private services sector payrolls fell by only 113,000 last month, compared to an average of 356,000 in the previous six months (See Chart).  Until May, service sector losses had outpaced goods sector losses for 8 out of the last 9 months.

Unemployment rate jumps to 9.4 percent.  While job losses reported by the BLS establishment survey showed moderated job losses, the household survey showed that the civilian unemployment rate jumped half a percentage point in May to 9.4 percent.*  The jump in the unemployment rate is partly due to the reduction in jobs, reflected in the establishment survey, and partly due to the inability of new entrants into the labor force to find employment.  Since January 2009, the labor force participation rate has grown from 65.5 percent to 65.9 percent even while the employment-to-population ratio has declined, indicating that new entrants are entering the work force faster than they can get a job.  The employment-to-population ratio is currently 59.7 percent, the lowest level since October 1984.  The broadest measure of unemployment (or underemployment), which includes the officially unemployed, marginally attached workers and workers who are part time for economic reasons, also jumped this month from 15.8 to 16.4 percent.  The ratio of part-time to full-time workers has risen substantially during the current recession, indicating that workers who wish to work full time have only found part-time work during the recession.  Between December 2007 and May 2009, part-time employment as a share of total employment has risen from 16.9 percent to 19.3 percent of the total employed.

Initial jobless claims appear to be declining.  Since reaching a peak of 658,750 for the week ending April 4, the 4-week moving average for initial jobless claims appears to be declining.  Although the average ticked up for the week ending May 30, it is still well below the peak reached two months ago.  However, the average of continued claims is still rising.  The 4-week moving average for continued jobless claims is almost 6.7 million, the highest level on record.  Before the current recession, continuing claims had peaked at 4.65 million during the second recession in the 1980s.

* The monthly employment report from BLS is actually made up of 2 surveys.  The establishment survey, which considers about 150,000 business and government agencies, provides an estimate of the number of payroll jobs in various sectors and industries.  The household survey, in contrast, estimates the number of persons who are employed or unemployed. It has a more expansive scope than the establishment survey because it includes the self-employed, unpaid family workers, agricultural workers, and private household workers, who are excluded by the establishment survey.