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Oil prices soar $10 more to new record

- The Washington Times - Friday, June 6, 2008

Unemployment shot up from 5 percent to 5.5 percent last month as employers laid off another 49,000 workers in the latest round of bad news for Americans struggling to make ends meet, the Labor Department reported this morning.

The dramatic increase in unemployment -- the largest in 22 years -- occurred in nearly every category from adult white men to black teenagers and appeared to be in part the result of students surging into the workforce looking for summertime employment. The rate for Hispanic workers was unchanged at 6.9 percent.

The huge increase in the jobless rate revived recession fears and provoked a bloodbath on Wall Street. The dollar plunged, sending oil prices up to a record $138.49 a barrel in the biggest one-day increase in history. The nearly $11 jump in oil prices pushed regular gasoline prices over $4 a gallon on average in the Washington area for the first time, AAA MidAtlantic said.

Stocks plummeted as investors' hopes for a summer economic revival were dashed by the worsening job outlook. The Dow Jones Industrial Average fell nearly 400 points or 3 percent to 12,210 at the 4 pm close of trading.

More than 120,000 jobs were lost in manufacturing, construction, retail trade and temporary help services -- areas that have been bleeding jobs all year as a result of the deep slump in housing that has spread to many other sectors of the economy.

Those losses were partially offset by a robust 54,000 job increase in education and health services jobs, as well as smaller gains in government and restaurant jobs.

Average wages rose by 0.3 percent, and were up by 3.5 percent in the last year -- not enough to keep pace with an inflation rate running over 4 percent.

Most economists believe the string of 324,000 job losses since December signals that the economy is in mild recession. Many predict the economy will improve in the second half of the years as consumers spend over $100 billion in tax rebates sent by the Treasury in recent weeks.