People line up at the Anaheim Orange County Job Fair and Expo in Anaheim, CA, 03 Jun 2009

The White House says America's employment picture is worse than the Obama administration had anticipated just a few months ago.  The somber admission follows the latest jobless report showing the highest unemployment rate the United States has seen in more than 25 years.

U.S. unemployment jumped a half percent in May, to 9.4 percent prompting this comment by Austan Goolsbee, a member of President Barack Obama's Council of Economic Advisors:

"The economy clearly has gotten substantially worse from the initial predictions that were being made, not just by the White House, but by all of the private sector," said Austan Goolsbee.

Economists point out that the current jobless rate is already higher than the hypothetical rate that was used to calculate the health of banks and other financial institutions in so-called "stress tests" earlier this year.  And, the upward unemployment trajectory is expected to continue in coming months, even if the overall economy begins to recover. 

Austan Goolsbee spoke on Fox News Sunday:

"It is going to be a rough patch [difficult period], not just in the immediate term, but for a little bit of time [in the future]," he said. "You have to turn the economy around, and jobs and job growth tends to come after you turn the economy around."

But Friday's employment news was not all bad.  Although the U.S. jobless rate continues to spike higher, the actual number of Americans who lost jobs during the month was the smallest since last September, the fourth consecutive month in which the pace of job losses slowed.

How can the unemployment rate continue to rise sharply while job losses are growing milder?  Goolsbee says recent indicators showing improvement in some sectors of the U.S. economy are encouraging Americans who had stopped looking for work to re-enter the job market.  With a larger pool of workers comes higher unemployment when the economy continues to shed jobs. 

Last week saw the federal government become a majority shareholder in U.S. automaker General Motors, which filed for bankruptcy.   Also appearing on Fox News Sunday, Alabama Republican Senator Richard Shelby was asked if the United States is headed towards a form of socialism. Shelby noted that GM is just the latest private corporation to fall under government control since the financial crisis struck last year.

"They [federal officials] intervened last fall in the bank crisis," said Senator Shelby. "No one has ever done it on that scale before.  Now the automobile crisis.  There is no doubt that we are going to government intervention everywhere, government ownership [that is] unprecedented in this country.  It is a slippery slope."

President Obama has said he has no interest in running General Motors, and will leave company decisions to GM senior management.  Mr. Obama has said the federal government's ownership of GM shares will be temporary.