The U.S. unemployment rate rose to 9.4 percent in May, the highest level in 26 years, the government said Friday. The one-month increase was 0.05 percent.

But for jobless workers age 55 and older, the news was mixed. While unemployment rose by only 0.3 percent to 6.7 percent, it was still the highest rate on record.

On the flip side, the labor force participation rate for those 55-plus grew to its highest level (40.4 percent) since 1962.

“What’s happening is that a lot of these people weren’t actively looking for work and now they are,” says Aaron Smith, a senior economist with Moody's Economy.com. With the deep losses in net worth that many have suffered, “a lot of those people will have to look for work, or work, longer.”

At the same time, last month’s job loss, which was smaller than expected, led some economists to declare that the job market was beginning to stabilize. Employers shed 345,000 jobs in May, the fewest since September and down from 504,000 job cuts in April. Construction and manufacturing drove the declines, the government said. The more moderate job losses may signal that the recession’s grip may be easing.

“This suggests the worst is over,” says Smith. “We’re inching toward stability. We anticipate the economy will start expanding in the third quarter of this year.”

John Challenger, chief executive at Challenger, Gray & Christmas Inc., a consulting firm in Chicago, says he sees fewer companies downsizing, which is a hopeful sign for older workers. But because the unemployment rate is a lagging indicator, he says, it will be among the last of the economic data to show improvement.

Carole Fleck is a senior editor at Bulletin Today.