We’re staring at the abyss folks, and today’s unemployment figures are dismal.

The U.S. lost jobs in May for a fifth month and the unemployment rate rose by the most in more than two decades, signaling that the world’s largest economy is stalling.

Payrolls fell by 49,000 after a 28,000 drop in April, the Labor Department said today in Washington. The jobless rate increased by half a point to 5.5 percent, higher than every forecast in a Bloomberg News survey, as an influx of teenagers into the workforce exceeded jobs available.

Employers are cutting back to protect profits as raw- material costs soar and sales slow. A weaker job market is another blow to Americans hit by falling home values, scarcer credit and higher fuel bills, adding to the risk that the longest consumer-spending expansion on record will come to an end.

“The labor market is still deteriorating,” said Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts. “The story is, we’re still on the verge of a recession” and “at best, the economy is growing very, very slowly.”

The verge isn’t recession, it’s disaster.  Even the Labor Department’s meta-massaged numbers can’t hide the largest monthly jump in unemployment in 22 years.  With real wages in the crapper and inflation grinding things to a halt, as I have warned before on several occasions, the inflationary pressures of oil and food will lead to a deflationary spiral of job loss and disaster as home prices continue to plummet and personal debt mounts.

We’re seeing now the strongest evidence yet that this is now beginning to be the case.  A .5% jump in the unemployment rate that the numbers are actually showing means the real jump in the rate is much worse.  Traditional summer jobs for high schoolers aren’t there this year.  Retail and waiter/waitress jobs, the standard summer job fare, aren’t being created.  There’s not a summer job bump because people are cutting back.

And because of that, jobs are being lost.  Businesses don’t need the extra help this summer.  Teenagers, with their disposable income, don’t have that income now.  They won’t buy things at the mall.  As a result, retail stores and chain dining places will need less help…and cut jobs.

It’s a vicious negative feedback loop, and we’re seeing evidence now that we’re trapped in it and will be for some time now.

The parent companies of casual dining chains like Bennigan’s and Steak and Ale are scrambling to avoid bankruptcy with food and gas costs being so high.  The days of Applebee’s, Olive Garden, Outback Steakhouse and Chili’s all on one corner are coming to an abrupt end as these restaurants are going under at an alarming rate.

When’s the last time you went to one of these restaurants?  I know I’ve cut back on my favorite eating spots myself to save money.  (Buffalo Wild Wings and Romano’s Macaroni Grill, for the record.)

LOS ANGELES, June 4 (Reuters) – Metromedia Restaurant Group on Wednesday said it is working on a debt restructuring plan, a move that could help the operator of struggling chains like Bennigan’s and Steak and Ale avert a potential bankruptcy.

The announcement came on the heels of a Wall Street Journal report that the unit of billionaire John Kluge’s privately held Metromedia Co was in talks with GE Capital Solutions and that the restaurant owner had prepared a bankruptcy filing in the event it was needed.

“Metromedia Restaurant Group is currently in the process of formulating a proposal to present to its lenders to restructure its indebtedness,” the company said in a statement, which underscored that the company “has neither filed for bankruptcy nor prepared a bankruptcy filing.”

The Journal report cited three people familiar with the matter and said the restaurant group had violated several terms of its lending agreement earlier this year, prompting GE Capital to declare a default and accelerate payments.

Americans buy stuff.  Right now, that stuff isn’t being bought.  It’s being spent on gas and groceries instead.  People aren’t buying Bloomin’ Onions at Outback.  They’re going to the grocery store and buying SPAM.

Americans apparently are eating Spam much more lately as food prices go up, up, up along with the cost of fuel and about everything else we’re buying these days.

Hormel Foods Corp., maker of Spam, reported last week that its Spam sales were up 10.6 percent in the 12 weeks ending May 3, when compared to a year ago. The Associated Press also reported that consumers may be adding Spam to their family meal lineup to add some variety and stave off boredom with at-home meals while forgoing restaurant dining to save money.

With a lighter version of Spam and even single slices in foil packaging available, the canned meat offers a cheaper alternative to more expensive meats, even though the cost of a can of Spam has risen as well — about 7 percent in the past year, to about $2.60 cents for a 12-ounce can.

We’re down to SPAM and gubment cheese, folks.  Things are tough all over.  Jobs will continue to vanish.  The economy will continue to spiral down into Hell.  Demand is dropping precipitously across the board, and as more jobs are lost, more demand is lost, and more debt is accumulated, something will give.  Things are bad, truly bad, now.

They’re going to get much worse.

Be prepared.