- DOJ reaches largest-ever federal government settlement over auto loan discrimination
- U.S. Navy to start giving gay couples marriage benefits in Japan
- Sen. Harry Reid goes to hospital as a precaution
- Fla.’s Trey Radel exits rehab, ‘excited’ to resume congressional role
- U.S. nuclear general boozed it up, chased ‘hot women’ in Russia: report
- 45 Calif. students at one school test positive for tuberculosis exposure
- Rob Ford on women: Give them cash ‘and they are happy’
- Ku Klux Klan group holds recruitment meeting in Maryland
- Airport assassination: Mayor, 3 others killed at Manila airport
- Tea party-type lawmakers take mysterious, off-books trip to Mideast
Unemployment, oil wallop Wall Street
Question of the Day
Unemployment surged from 5 percent to 5.5 percent last month - the biggest increase in 22 years - as businesses continued to lay off workers and curb their wage gains, the Labor Department reported Friday.
The dramatic increase in the politically sensitive unemployment rate rocked global markets, provoking a domino effect that started with a plunging dollar and ended with the biggest-ever gain in oil prices to a record $138.54 a barrel in New York trading. That breathtaking $10.75 rise in oil sent regular gas prices to $4 a gallon for the first time in the Washington area.
The toxic combination of soaring unemployment and oil prices, in turn, raised fears of recession and sent stocks plummeting, with the Dow Jones Industrial Average falling nearly 400 points to 12,210 - its worst loss in more than a year.
The economic news was “a shocker” for markets and consumers, said Bernard Baumohl, managing director of the Economic Outlook Group. The jobless rate was pushed up by a 861,000 jump in unemployment reported by households, while businesses reported another 49,000 job losses - all “horrific” numbers that “scream recession,” he said.
Meanwhile, the surge in oil prices “is threatening the economy” and creating more hardship for American households, which have to foot a $4,000 average bill for gasoline this year while beset by job worries, credit problems and housing woes, said John Townsend of AAA MidAtlantic. “It’s frightening to think how high gas prices will go” with the latest surge in crude prices.
Oil prices should decline as the economy weakens and consumers cut back on gas purchases, but they keep on rising, he said.
“Crude oil is like this Frankenstein monster doing its own thing contrary to the rest of the economy. It’s run amok,” Mr. Townsend said.
Job hunters were no less perturbed by the twin pressures of rising unemployment and soaring costs for housing, food and fuel.
The economy has lost 324,000 jobs since December, mostly in manufacturing, construction, retail and temporary work. The only consistently bright spots for job hunters have been health care, education, government and restaurant work.
But while the job picture has been darkening, it is not as bad as the “headline” figures in Friday’s job report suggest, said Mr. Baumohl. Nearly all the job losses have been the result of the slump in housing, the mortgage mess and cutbacks in consumer spending at department stores and other retailers, he noted.
“We have seen far fewer layoffs outside these sectors because companies have been more judicious in their hiring practices the last several years,” Mr. Baumohl said, noting that the lack of pervasive layoffs has resulted in “surprisingly modest” increases in unemployment insurance claims.
“The economy is very weak, perhaps even in recession, but it is not falling off a cliff, as these numbers first suggest,” he said.
A less-threatening job scenario was seen in a recent survey by Dice Holdings Inc., which provides job Web sites for professionals. It found that about half of employers planned to scale back hiring and the rest planned no changes.
“We´re seeing a mixed and uncertain hiring environment,” said Dice President Scot Melland. “Roughly half of employers are sticking with their hiring plans, but with a degree of caution and hesitancy you might expect, given the lukewarm economy. At the same time, the majority of companies do not appear to be forecasting a dire turn for the worse anytime soon.”
Stephen Stanley, economist with RBS Greenwich Capital, said the job losses in April and May were half the 82,000 average posted during the first three months of the year, suggesting a modest improvement in the job market despite the “jolting headline.”
About the Author
- Federal Reserve surprises with pullback on bond stimulus plan
- Fed eases up on stimulus bond-buying program
- Canadian court backs plaintiffs in Chevron case of Ecuadorean rain forest pollution
- H2OIL: New fuel technology gulps water, threatens supply
- Russian officials press bilateral U.S. trade deal
Latest Blog Entries
By John McAfee
- Breaking Fad: Alligators becoming the new pit bulls for drug dealers, cops say
- D.C. to tout Obamacare among youth waiting for Air Jordans
- Huge backlash mounts over suspension of 'Duck Dynasty' star Phil Robertson
- TARGET credit card theft swells to 40 million victims
- Special ops vets slam military benefit cuts
- Obama: 2014 will be 'breakthrough year' for U.S.
- Dems use new filibuster rules to approve DHS nominee Alejandro Mayorkas under investigation
- Obamacare 'pajamas boy' gets roundly mocked
- Citing 'unfair system,' Obama commutes sentences for 8 crack offenders
- Homeland Security helps smuggle illegal immigrant children into the U.S.
Independent voices from the The Washington Times Communities
Our Choice: Individual responsibility and self-government or the abandonment of the American Revolution
Al Maurer provides a common sense, conservatarian, Constitutional conservative perspective from the battleground state of Colorado
Top 10 handguns in the U.S.
Extraordinary day at Redskins Park
White House pets gone wild!
Let it snow