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Oil, job losses batter Dow

Anyone lulled into thinking the country might be on the mend economically got an unwanted wake-up call Friday. And then another, and another.

The government kicked things off with a report that the nation's unemployment rate rose to 5.5 percent in May. That amounted to a monthly rise of half a percentage point, the biggest in decades.

Wall Street suffered its worst losses in more than two months, and an already weak dollar fell even further against the euro.

But perhaps the biggest shock came in the energy trading pits. Oil prices made their biggest single-day leap ever – spiking nearly $11 to a record high.


The price of crude oil soared to more than $138 a barrel. Coupled with a $5.49 gain Thursday, the rise produced the biggest two-day gain for crude in the history of the New York Mercantile Exchange. Some analysts forecast that the price of a barrel of oil could hit $150 by July 4, causing even more pain at the pump for motorists during the peak summer travel months. Friday's jump – equivalent to the entire price of a barrel of oil in late 1998 – was fueled in large part by the dollar's sharp fall and heightened tensions in the Middle East.


All 30 of the stocks that make up the Dow Jones industrials took a hit as the index dropped nearly 400 points on fears that high energy prices will deepen an economic slowdown. At the close, the Dow was off 3.13 percent, or 394.64 points. Wall Street has run into choppy waters over the past two weeks after a period of relative calm. Friday's decline was a return to the triple-digit drops of February and March, when the market was rocked by the Bear Stearns bailout and significant interest rate cuts from the Federal Reserve.


The U.S. unemployment rate rose to 5.5 percent in May, up from 5 percent the month before, as employers cut 49,000 jobs. It was the biggest monthly rate increase since 1986 and the fifth straight month that employers have shed jobs. The rates for the Charlotte area, North Carolina and South Carolina have been higher than the U.S. rate this year, though the Charlotte region has seen its rate drop slightly. The N.C. jobless rate was 5.4percent in April, the most recent month for which state data were available. The S.C. rate was 5.9 percent.