Smallest job loss since September, but unemployment rises more than expected WASHINGTON (MarketWatch) - The U.S. unemployment rate jumped to a 26-year high of 9.4% in May as 345,000 payroll jobs were lost, the Labor Department reported Friday. The decline in payrolls was the smallest since September, and much lower than the 500,000 expected by economists surveyed by MarketWatch. Payrolls had lost an average of 643,000 in the previous six months. Payrolls in March and April were revised higher by 82,000. Details of the report were mixed. While the payroll figures from a survey of business sites was much better than expected, a separate survey of households showed unemployment increased more than expected. Unemployment rose by 787,000 in the month to 14.5 million, pushing the jobless rate from 8.9% to 9.4%, the highest since August 1983. Steep job losses continued in the goods-producing industries, with 225,000 payrolls lost. Manufacturing industries lost 156,000, with just 12% of manufacturing industries adding workers. Construction industries lost 59,000 jobs, the fewest since September. Among 271 industries across the economy, 32.7% were hiring in May. The pace of job loss moderated in services, which lost 120,000 jobs, the fewest since August. Temporary help jobs fell by 6,500, the fewest since the recession began in December 2007. Health-care firms added 36,000 jobs in May. Retail lost 17,500. Financial services lost 30,000. Government agencies lost 7,000 jobs, including 15,000 in the federal government. Total hours worked in the economy fell by 0.7%. The average workweek fell to a record-low 33.1 hours. An alternative gauge of unemployment - which includes discouraged workers and those whose hours have been cut back to part-time - rose to a record 16.4% from 15.8%. The records go back to 1994. The number of workers forced to work part-time rose by 164,000 to 9.1 million. Average hourly earnings rose by 2 cents, or 0.1%, to $18.54. In a separate survey of households, the government found that employment fell by 437,000. Unemployment rose by 787,000 to 14.5 million, while 350,000 people joined the workforce. The number of people who've been out of work longer than six months rose by 268,000 to 3.9 million, representing 2.5% of the workforce, the highest since 1983. The employment-population ratio fell to 59.7%, the lowest since October 1984

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