Just like you never want to hear a doctor say "oops" in the operating room, you never want to see a going-concern statement in a financial report about a company you own. Accountants throw these in when they've been over the books, talked to customers, and checked the horoscopes and have concluded there is "substantial doubt" about a company's ability to remain in business. In short, don't blame the accountants if the company files for bankruptcy protection.

You¿d reckon that a going-concern statement would be enough to send investors running to the exits, but it's not. True, many large institutions automatically bail when an existing company gets slapped with one of these, but many individuals (often wrongly) take a chance they know more than the bean counters.

During the tech boom of the late 1990s, many companies actually went public even though they had been hit with going-concern statements. Many of those companies subsequently disappeared. Enough said.

Home / Markets / Economy

Friday, June 06, 2008

U.S. Loses 49K Jobs in May; Rate Jumps to 5.5%

Email this Story | Respond to Editor | Print

FOXBusiness

The government reported the U.S. lost 49,000 jobs in May as the unemployment rate rose by the largest amount since February 1986.

The Labor Department reported the fifth consecutive month of declines in nonfarm payrolls. The decline was better-than-expected however, as economists had been expecting a 60,000 job decline for last month.

The unemployment rate, which is calculated separately by a survey of households, soared to 5.5% in May. Wall Street had only been expecting a slight rise to 5.1%. It's the highest the rate has been since October 2004.

The government reported that the number of people classified as unemployed jumped by 861,000 last month to 8.5 million. According to the Bureau for Labor Statistics, the increase in unemployed people is a reflection of job cuts as well as new and returning job seekers. It also said the unemployment uptick was "disproportionately large" among 16 to 24-year olds.

The U.S lost more jobs in May than in April, when the government reported a more modest 28,000 job decline. In March the Labor Department reported an 88,000 job loss.

While the labor situation has weakened amid job cuts in the construction, financial and manufacturing sectors, experts have said employment has not fallen off the map.

Thanks to the ongoing housing slump, the construction sector took the biggest hit in May, shedding 34,000 jobs. Over the past seven months the nation has lost 320,000 construction positions.

Manufacturing continued to lose jobs, posting a 26,000 job decline last month.

On the upside, the health care industry continued to add employees. The sector expanded by 34,000 jobs in May.

The government also said average hourly earnings rose by 5 cents, or 0.3%.