The U.S. Labor Department said today that the nation's unemployment rate jumped to 5.5% in May from 5.0% in April, the biggest monthly increase since February 1986 and a rise that places unemployment at the highest level since October 2004.

Wall Street had predicted an uptick to 5.1%. The Dow Jones industrial average fell more than 360 points today on both that news and reports that oil prices surged more than $10 a barrel to a fresh record. The number of U.S. jobs shrank by a smaller-than-expected 49,000, but the development offered Wall Street little solace given that May marked the fifth straight month of jobs losses.

Signs that the U.S. job market is deteriorating more than anticipated could thwart investors' hopes that the economy is poised for recovery later this year. That notion had helped propel the stock market from its mid-March lows.

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