Economics 101: A recession occurs when GNP decreases and unemployment increases.
In what one economist has called the “strongest evidence yet” that the U.S. is in recession, the country’s jobless rate has grown 0.5% since April, the largest monthly jump in more than 20 years. The unemployment rate has been steadily rising this year, with 324,000 jobs lost since January.
The Los Angeles Times:
The nation’s unemployment rate took a sharp turn for the worse in May, jumping to 5.5% from 5% a month earlier—the largest one-month increase in more than two decades and a further sign that the ailing economy is not yet on the mend.
Altogether, the economy lost 49,000 jobs in May and 324,000 jobs since the beginning of the year—five straight months of contraction, the Bureau of Labor Statistics reported today. The economy must create about 100,000 jobs a month just to keep pace with population growth.
Peter Morici, an economist at the University of Maryland, said the report was “the strongest evidence yet that the economic expansion has slipped into a recession of uncertain depth and duration.”
“The situation is even worse than this jump indicates,” Morici said. “A large number of adults have left the labor force in recent years. Factoring in the decline in the number of adults participating in the labor force, the unemployment rate is closer to 7%.”