Economy takes nose dive as Israel Threatens Strikes on Iran
WASHINGTON (AP) -- Pink slips piled up and jobs disappeared into thin air in May as the nation's unemployment rate zoomed to 5.5 percent in the biggest one-month jump in decades. Wall Street swooned, and the White House said President Bush was considering new proposals to revive the economy.
Help-wanted signs are vanishing along with jobs, so the unemployment rate is likely to keep climbing, a government report indicated, underscoring the toll the housing and credit crises are taking on jobseekers, employers and the economy as a whole.
Adding to the pain, oil prices soared to a new record high, while the value of the dollar fell.
The Dow Jones industrials tumbled almost 400 points.
The White House snapped into crisis-management mode. The president is now considering further plans to help energize the economy, which had already been teetering on the edge of recession, said counselor Ed Gillespie. Bush acknowledged, "This is a time of turbulence in the housing market and slow growth for our overall economy."
Pounded by soaring energy prices and plagued by uncertainty, nervous employers clamped down further on hiring in May.
Friday's Labor Department report was filled with sobering numbers:
-- Employers eliminated 49,000 jobs in May, the fifth straight month of nationwide losses.
-- The number of unemployed people grew by 861,000 -- to 8.5 million.
-- Job losses for the year reached 324,000.
The global crude price ended a run of lower prices earlier this week as it jumped by more than $9 a barrel to $136.79 (£69.44) - it has risen by over $14, or 10%, in just two days. The week before last saw an all-time high of $135.09 a barrel but, by Wednesday this week, prices had receded to as low as $122.Already jittery oil markets were sent into spasms by remarks from Israel's transport minister that an attack on Iranian nuclear sites looked "unavoidable". Iran is a big Opec oil producer and any attack on the country would threaten oil supplies from the whole region.