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US Economy Slowing Down

Updated:
WASHINGTON (AP) - In the most dramatic sign yet that the U.S. economy is slowing, the unemployment rate climbed back to 4.1% in May as American businesses lost 116,000 jobs, the worst showing in nearly nine years. The Labor Department reported Friday that the nation's unemployment rate climbed by 0.2 percentage points from a 30-year-low of 3.9% in April. The increase returned the jobless rate to the same 4.1% level it had reached in March. Overall payrolls rose by 231,000 in May, but all the strength occurred in government hiring of temporary workers to conduct the census. There was a gain of 357,000 census workers. However, American businesses cut 116,000 jobs during the month. It was the first time that U.S. companies had suffered a job loss for any month since a severe winter storm disrupted hiring plans in January 1996. It was the biggest decline since 129,000 private sector jobs were lost in November 1991 as the country was pulling out of the last recession. While fewer private sector jobs is not good news for workers, Wall Street was likely to be bolstered by the rise in the unemployment rate, viewing it as the latest and most dramatic sign yet that the surging U.S. economy is finally slowing to a more moderate pace. If the economy is finally showing signs of a slowdown, it would take pressure off the Federal Reserve to boost interest rates at its next meeting at the end of this month. Friday's unemployment report followed a string of releases in the past week indicating that the economy has finally begun to respond to the six rate hikes the central bank has engineered over the last year
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