WASHINGTON With companies in no mood to hire, the unemployment rate jumped to 9.4 percent in May, the highest in more than 25 years.

But the pace of layoffs eased in May, with employers cutting 345,000 jobs, the fewest since September.

The much smaller-than-expected reduction in payroll jobs, reported by the Labor Department on Friday, adds to evidence that the recession may be loosening its hold on the country. May was the fourth straight month that the pace of layoffs slowed.

“This tide is turning,” said Richard Yamarone, economist at Argus Research. “We expect this trend of slower job loss to continue throughout the year.”

But if fewer are being laid off as spring turns into summer, no one is getting a new job, either.

The Charlotte region's jobless rate dipped for the second straight month in April, falling from 11.6 percent to 11.4 percent.

Still, The increase in the nation's unemployment rate from 8.9 percent in April underscores the difficulties that America's 14.5 million unemployed are having in finding new jobs. Economists had expected the rate to hit 9.2 percent last month.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.4 percent in May, the highest on records dating to 1994.

Labor Secretary Hilda Solis called the rise in May's unemployment rate “unacceptable” and pledged to help bring it down by aiding unemployed workers get new skills or training.

President Obama's stimulus package is expected to help bolster the economy. Vice President Joe Biden said he will join Obama on Monday in seeking to ramp up the pace this summer of the stimulus effort that Congress approved earlier this year.

Even with layoffs slowing, companies will be reluctant to hire until they feel certain that economic conditions are improving – and that any recovery will last.

Since the recession began in December 2007, the economy has lost a net total of 6 million jobs.

As the recession – now the longest since World War II – bites into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive the fallout. Those include holding down workers' hours and freezing or cutting pay.

Friday's report “supports the notion that the recession will end this year,” Yamarone said. But pain will linger and the jobless rate will move higher. He predicts it will peak at 10.2 percent early next year.

The Fed says unemployment will remain elevated into 2011 given the expectation of tepid recovery. Economists say the job market may not get back to normal – meaning a 5 percent unemployment rate – until 2013. Economic recoveries after financial crises tend to be slower, economists say.

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