MercoPress. South Atlantic News Agency

US job losses moderating but May rate reached 9.4%

Six million jobs have been lost in the US since December 2007

The US White House economic adviser Christina Romer on Friday said that May payrolls data was consistent with a trend of moderating job losses, but the unemployment rate would stay high for a while.

“Even as we see things start to stabilize and hopefully grow again, we do know that unemployment tends to lag, and so that the unemployment rate is going to be high and probably stay high for a while, precisely because that is sort of the normal pattern as we come out of recession” Romer told Bloomberg television.

The US jobless rate in May shot up from 8.9% to 9.4% with 345.000 more jobs slashed from company payrolls. This is the highest rate since July 1983. Yet economists said they had expected even larger jobs cuts, and the smaller numbers offered a sign that the worst recession in decades is starting to give way.

Construction lost 59.000 jobs compared to 108.000 in April; services suppliers eliminated 120.000 positions compared to 230.000 in April while in manufacturing contraction reached 156.000.

On the bright side education and health services expanded contracting 44.000 following a positive 13.000 in April. However the US federal government which incorporated 92.000 posts in April was down to 7.000 in May.

Since the beginning of recession in December 2007, the US economy has slashed over six million jobs.

Addressing reporters US Vice-President Joe Biden said Friday that the latest jobs report reflects how millions of Americans are still hurting, but he also said there were “some signs of hope today”.

But he underlined “the mission remains to create jobs”, he said. “Let me be very clear: A lower job-rate loss is not our goal. Less bad' is not how we're going to measure success”.

Biden, President Obama's point person in overseeing the massive 787 billion US dollars economic stimulus recovery plan, has defended the pace of spending as critics have complained that money for roads, bridges and other infrastructure projects has been slow to arrive.

Last Monday Biden said President Obama will be announcing plans to “ramp up” implementation of the stimulus program over the summer but offered no details.

Biden said there were discernible signs that the efforts by Congress and the White House are helping, citing a big drop in construction unemployment. Again, though, he balanced any optimism by cautioning that there will be “more setbacks on the road before we get finally to recovery.”

“To sum it up: Encouraging signs, but a long, long way to go” said the Vice-president.