Jobs cut for 5th straight month, unemployment rate jumps

WASHINGTON (Reuters) - U.S. employers shed jobs for a fifth straight month in May and the unemployment rate jumped to its highest in more than 3-1/2 years, partly because more people were trying to come back into the workforce, a Labor Department report on Friday showed.

The unemployment rate rose to 5.5 percent last month from 5 percent, its highest level since October 2004. Some 49,000 jobs were cut from payrolls in May, up from a revised 28,000 that were lost in April.

Wall Street economists surveyed by Reuters forecast that 58,000 jobs would be lost in May but had foreseen the unemployment rate rising only to 5.1 percent. So far in 2008, job losses have totaled 324,000, the department said.

The number of people in the workforce climbed by 577,000 in May, up sharply from an increase of 173,000 in April. Department officials noted that in the period from April through July, there typically is an increase in the numbers of young people seeking temporary work when school is out.

There were substantial job losses in May in construction industries where 34,000 cuts were made, in manufacturing where 26,000 jobs were lost, and among providers of professional services where 39,000 jobs were lost.

(Reporting by Glenn Somerville, editing by Joanne Morrison)