Economy sheds more jobs as unemployment rockets to 5.5%

The U.S. economy lost 49,000 jobs in May, the U.S. Labor Department announced Friday, as companies in the world's largest economy continued to cut expenses to protect profits in the face of the economic slowdown.

Further, the unemployment rate surged 0.5 percentage points to 5.5% in May from 5.0% in April. It was the largest percentage point increase in the unemployment rate since 1986, the Labor Department said. It's also the highest unemployment rate since October 2004.

Economists surveyed by Bloomberg News had expected the U.S. economy to shed 60,000 jobs in May 2008 and the unemployment rate to rise to 5.1%. Also, May was the U.S. economy's fifth straight monthly job loss. The U.S. economy lost a revised 28,000 jobs in April.

Further, the number of unemployed persons increased by 861,000 to 8.5 million in May. The average work week in May was unchanged at 33.7 hours.

Economist David H. Wang told BloggingStocks Friday that if the U.S. economy is not in a recession, it's barely growing. "These May job loss numbers indicate that if the economy is not recession it's the weakest growth possible. We are in a growth recession because unemployment is now leaping ahead," Wang said. "Companies are continuing to belt-tighten and become more cautious, jobs are being cut, and vacant positions are not being filled. It's almost impossible for the economy to sustain these type of job cuts and not be in a recession."