Unemployment rate rises as job creation slows

June 3, 2011

City Room and AP Wires

(File/Getty/Justin Sullivan)

The nation's unemployment rate rose to 9.1 percent in May, as hiring slowed to the lowest level in eight months, according to the U.S. Department of Labor. 

The Labor Department reported that employers hired only 54,000 new workers in May, down sharply from the previous three months, when the economy added an average of 220,000 new jobs.

The new data 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. 

"Every time we've had a strong quarter, it's been followed by a week one," FTN Financial Chief Economist Chris Low told PRI's Marketplace Morning Report on WBEZ Friday.

In May, private companies hired only 83,000 new workers - the fewest in nearly a year.  Local governments cut 28,000 jobs last month, the most since November. That marks the 22 straight month in which municipalities have shed jobs.  

More people entered the work force last month, which pushed the unemployment rate up from 9.0 percent in April.

Despite the rise in unemployment and the drop in job creation, Low noted that while the May numbers are the worst in eight months, but the April numbers were the best in six years. 

"It's important to view the two months together," he said.

Meanwhile, the Illinois Department of Employment Security reported last week that unemployment rates fell in each of Illinois' 12 metro areas during the month of April.  That marks the eight consecutive month in which unemployment rates have declined. 

Earlier this month the department said statewide unemployment fell in April from 8.8 percent to 8.7 while the national rate rose .2 percent to 9 percent.