The job numbers for May are in — and they aren’t pretty:

With companies in no mood to hire, the U.S. unemployment rate jumped to 9.4 percent in May, the highest in more than 25 years. But the pace of layoffs eased, 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 is loosening its hold on the country. It marked the fourth straight month that the pace of layoffs slowed.

There is no doubt that the pace of layoffs has slowed over the course of the last four months. My view is that employers may have laid off less people in March, April and May as a result of rising stocks markets globally and green shoots here at home.

Don’t be surprised if the pace accelerates a little (or a lot) after we see a re-collapse of the global financial markets and employers realize that we are actually out of the recession and headed into a depression!

One other thing to consider is the bank ‘stress’ test result released last month, which utilized a worst-case, adverse scenario of 10.3%. Even with job losses slowing, we may exceed the 10.3% bank stress test figures within the next two or three months. I suspect that the banks are not as well capitalized as we have been led to believe.