WASHINGTON — The pace of job losses in the U.S. that have ballooned since the Wall Street collapse last fall slowed in May, as the economy shed 345,000 jobs — the fewest losses since September — and the unemployment rate rose to 9.4 percent from 8.9 percent in April, the Labor Department said Friday.
Since the recession started in December 2007, six million jobs have been lost, according to the Labor Department. Employment levels have fallen consistently this year, but the May drop was about half the average monthly decline over the last six months.
“The light at the end of the tunnel just got a lot brighter,” said Nigel Gault, chief U.S. economist at IHS Global Insight. “May’s employment report brings clear evidence that the labor market is beginning to stabilize.”
Department stores helped the jobs picture by adding 4,500 positions to employ 1.53 million last month, but specialty stores that have been hurt more by consumer spending cutbacks slashed 3,300 jobs to employ 1.43 million.
Apparel fabric manufacturers, or textile mills, eliminated 800 positions to employ 127,000 workers last month. Textile product mills, which make home furnishing fabric, cut 100 jobs to 127,200 positions. Domestic apparel producers added 200 jobs to employ 170,100.
Economists cautioned that while the May report gave some cause to hope for recovery, job losses are still rising.
“It’s encouraging news, but we’re far from out of the woods yet,” said Richard Yamarone, director of economic research at Argus Research Corp. “We’re still furloughing hundreds of thousands of workers. I’m not willing to believe that consumers are all that confident when the unemployment rate is rapidly approaching 10 percent.”
Labor Secretary Hilda Solis called the rise in May’s unemployment rate “unacceptable” and pledged to help bring it down by helping the unemployed get new skills or training.
Scott Hoyt, senior director of consumer economics at Moody’s Economy.com, said department stores have fared better than specialty retailers because the sector encompasses a broad range of companies that sell at a variety of price points, allowing them to keep staffing levels marginally higher.
“In general we know the discount retailers are performing better in the current economic climate as consumers trade down,” Hoyt said.
Wal-Mart Stores Inc. said last week it would add 22,000 U.S. jobs to payrolls.
“Clearly, the precipitous plunge [in employment] late last year and early this year has moderated sharply,” said Charles McMillion, president and chief economist at MBG Information Services.
But economists noted the auto sector collapse will impact top-line employment numbers significantly in the coming months. However, they also point out the federal economic stimulus package is expected to help bolster the economy as projects get under way this summer.