Shock US unemployment jump raises warning flags

0 Comments | AFP, June, 2008

WASHINGTON (AFP) — US unemployment in May unexpectedly surged by the strongest increase in 22 years, Labor Department data showed Friday, raising warning flags that the economy is headed in the wrong direction.

A shock half-point jump in the unemployment rate to 5.5 percent from 5.0 percent in April left analysts divided over whether the huge increase in the number of people seeking jobs is a sign of recession or a statistical fluke.

The unemployment snapshot makes it more unlikely the Federal Reserve will hike interest rates anytime soon, despite building inflationary pressures from spiraling energy and food prices, analysts said.

Most economists had expected a sharply lower unemployment rate of 5.1 percent. The increase was the largest monthly change since...