Unemployment Rate Jumps to 5.5% in Biggest Jump Since ’86

The U.S. unemployment rate jumped to 5.5% in May, from 5% in April, the biggest jump in 22 years, the Labor Department said Friday.

The increase in the unemployment rate was the biggest since February 1986, while payrolls plunged by 49,000, Labor said. The decline was the fifth straight, as payrolls fell by 28,000 in April.

The unemployment rate was higher than economists’ forecasts, which projected a rate of 5.1%, Bloomberg reported. Payrolls were forecast to fall by 60,000 jobs.

Factory payrolls plunged 26,000, less than the 40,000 forecast, Bloomberg reported. Auto factories added 4,400 jobs. Manufacturing jobs had declined by 49,000 in April.

Service industries added 8,000 workers, following a 72,000 increase the previous month.
The unemployment-rate gauge is based on a survey of households. The number of payroll jobs added is determined by a separate survey of business and government establishments.