The country's unemployment rate soared to 9.4 percent in May - the highest it's been in more than 25 years.

The rate, up from 8.9 percent in April, was worse than analysts were expecting. Experts say the high rate underscores the difficulties that America's 14.5 million unemployed are having in finding new jobs.

Meanwhile, the Department of Labor also announced that U.S. companies slashed fewer jobs than expected. Employers cut 345,000 jobs, the fewest since September.

The much smaller-than-expected reduction in payroll jobs adds evidence that the recession is loosening its hold on the country, officials say. It also marks the fourth-straight month that the pace of layoffs slowed.

AP wires contributed to this report.