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WORLD> America
US unemployment rate at 26-year high
(Agencies)
Updated: 2009-07-02 23:30

WASHINGTON: Employers cut a larger-than-expected 467,000 jobs in June, driving the unemployment rate up to a 26-year high of 9.5 percent, suggesting that the economy's road to recovery will be bumpy.

The Labor Department report, released Thursday, showed that even as the recession flashes signs of easing, companies likely will want to keep a lid on costs and be wary of hiring until they feel certain the economy is on a solid ground.

June's payroll reductions were deeper than the 363,000 that economists expected.

US unemployment rate at 26-year high
Job seekers look over the employment bulletin board of the New York State Labor Department's Division of Employment Services in the Brooklyn, June 2009. [Agencies] 
However, the rise in the unemployment rate from 9.4 percent in May wasn't as sharp as the expected 9.6 percent. Still, many economists predict the jobless rate will hit 10 percent this year, and keep rising into next year, before falling back.

All told, 14.7 million people were unemployed in June.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.5 percent in June, the highest on records dating to 1994.

Since the recession began in December 2007, the economy has lost a net total of 6.5 million jobs.

As the downturn bites into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive. Those include holding down workers' hours and freezing or cutting pay.

Related readings:
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US unemployment rate at 26-year high Obama says 'get used' to high unemployment
US unemployment rate at 26-year high Texas gov. rejects stimulus money for unemployment
US unemployment rate at 26-year high US new jobless claims swell to 627K

The average work week in June fell to 33 hours, the lowest on records dating to 1964.

Layoffs in May turned out to smaller, 322,000, versus the 345,000 first reported. But job cuts in April were a big deeper -- 519,000 versus 504,000, according to government data.

Even with higher pace of job cuts in June, the report indicates that the worst of the layoffs have passed. The deepest job cuts of the recession came in January, when 741,000 jobs vanished, the most in any month since 1949.

And there was some other encouraging job news Thursday.

In a separate report, the department said the number of newly laid-off workers filing applications for unemployment benefits fell last week to 614,000, in line with economists' predictions. The number of people continuing to draw benefits unexpectedly dropped to 6.7 million.

Still, job losses last month were widespread.

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