In May across the nation, 345,000 jobs were lost, worsening the U.S. unemployment rate to 9.4 percent, according to data released today by the Department of Labor.

 

There are now 14.5 million jobless U.S. workers, a number that doesn’t reflect the severity of the problem. If those who are underemployed or who want a job but have given up looking are counted, the broader U.S. unemployment rate stands at 16.4 percent-more than 25 million Americans who need jobs or full-time work but cannot find it.

 

The number of long-term unemployed (those jobless for 27 weeks or more) increased by 268,000 over the month to 3.9 million and has tripled since the start of the recession in December 2007.

 

According to the Labor Department’s Bureau of Labor Statistics (BLS), the job loss was spread throughout most industries, moderating in construction and retail:

 

Manufacturing employment fell by 156,000 in May..Employment in construction decreased by 59,000 in May, compared with an average monthly job loss of 117,000 in the industry for the previous six months..Job losses in profesional and business services moderated in may, with the industry shedding 51,000 jobs..Retail trade employment was down by 18,000 in May; job cutbacks in retail have moderated markedly in the past two months.

 

Health care employment increased by 24,000, and employment in government changed little in May.

 

AFL-CIO President John Sweeney described today’s jobs data this way:

 

The moderation of job loss is welcome news and an affirmation of the early steps taken by the Obama administration, but until the recession ends and we see sustained economic growth, jobs will continue to disappear and the ranks of the unemployed will growth.

 

Minutes after the BLS released the May unemployment data, the corporate media already was predicting the end of the recession because the nation lost "only" 345,000 jobs in May.

 

Not so fast.

 

Even if monthly job losses continue to diminish and the recession ends this year, the nation likely will confront a massive employment deficit of 10 million jobs and a long period of slow wage growth, according to the Economic Policy Institute (EPI).

 

From the Daily Labor Report (subscription required):

 

"I think we will have high unemployment for a long time" after the recovery begins, EPI President Larry Mishel said in a telephone news conference. Mishel predicted that the unemployment rate will reach 10 percent by the end of the year, sooner than many economists expect.

 

In the early 1990s, it took 15 months from the official end of the recession before the unemployment rate stopped rising-and 19 months after the end of the recession in the early 1980s. But it’s not sufficient for the unemployment rate to fall to turn around the economy. The number of new jobs created must keep up with population growth-that means 127,000 news jobs must be created a month, according to EPI.

 

In a June 3 conference call, Mishel noted another worrying trend: wage decline. Although wages held steady last year, beginning in late 2008 or early 2009, wage growth skidded to a near halt, and now is barely growing. While job numbers get the attention, Mishel says wage growth is a critical indicator of the health of our economy.

 

Why do we care about wage growth? For most families, wages are what they live on. It means the recession is now adversely affecting those lucky enough to keep a job. Wage growth is being knocked down so much we will see inflation outpacing wage growth.

 

Underemployment, long-term unemployment and wage growth are three key factors to keep in mind when the Wall Street crowd crows that losing 340,000 in one month is good news.

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