Unemployment rate rises to 9.1 percent

New jobs report shows employers hired only 54,000 new workers in May -- the fewest in eight months

Topics: Unemployment,

Employers hired only 54,000 new workers in May, the fewest in eight months, and the unemployment rate rose to 9.1 percent.

The Labor Department report offered startling evidence that the U.S. economy is slowing, hampered by high gas prices and natural disasters in Japan that have hurt U.S. manufacturers.

The pace of hiring has weakened dramatically from the previous three months, when the economy added an average of 220,000 new jobs. Private companies hired only 83,000 new workers in May — the fewest in nearly a year.

Stock futures plunged after the report was released.

Local governments cut 28,000 jobs last month, the most since November. Nearly 18,000 of those jobs were in education.

Cities and counties have cut jobs for 22 straight months and have shed 446,000 positions since September 2008.

More people entered the work force last in May. But most of the new entrants couldn’t find work. That pushed the unemployment rate up from 9.0 percent in April. The number of unemployed rose to 13.9 million.



And the government revised the previous months’ job totals to show 39,000 fewer jobs were created in March and April than first thought.

The weakness in hiring was widespread. Manufacturers cut 5,000 jobs, the first job loss in that sector in seven months. That included a drop of 3,400 jobs in the auto sector. Several Japanese car makers reined in production due to supply disruptions stemming from the March 11 earthquake.

Retailers cut 8,500 positions, after adding 64,000 in April. And leisure and hospitality which includes restaurants and hotels, cut 6,000 jobs. That came after they added an average of 43,000 in the previous three months.

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