DUBLIN, Ireland — Irish unemployment jumped last month to a nine-year high of 5.7 percent, the Central Statistics Office reported Friday, in the latest sign that Ireland is heading toward a recession.

The rise from May's rate of 5.4 percent follows confirmation earlier this week that Ireland's economy shrank by 1.5 percent in the first quarter of 2008 — the first such retreat in more than two decades.

There has been a sudden reversal in the long-booming construction sector, a key plank in the economic boom that began in 1994 and fizzled last year. Property prices have dropped by about 10 percent nationally in recent months, driven by weakening consumer confidence and tightening credit following the U.S. subprime crisis.

More than a decade of dizzying price rises spurred Ireland to build upward of 70,000 new homes a year, but economists expect less than half that figure to be built this year. Several developments have been suspended midway and developers have filed for bankruptcy.

The government is under pressure to cut back its own investment program for roads and infrastructure because of falling tax revenues — another loss connected to the fading property market, because the government heavily taxes house sales. The government this seek said it expected to run a budget deficit exceeding 3 billion euros ($4.5 billion) this year after more than a decade of budget surpluses.

Deputy Prime Minister Mary Coughlan said the Cabinet would decide Tuesday on a program of spending cutbacks, estimated in the region of 500 million euros ($750 million).

"It's important to say we're not in a situation of meltdown. We're not in a situation where the public finances are in serious threat. This is not the 1980s," Coughlan said, referring to Ireland's last era of economic turmoil, when government debts soared and emigration was rife.

Friday's report said the number of people signing up for unemployment benefits rose 9.5 percent in June to more than 220,000. The total included more than 25,000 people with casual or part-time jobs who nonetheless qualify for state welfare.

Ireland continues to produce new jobs, particularly for university-educated chemists, software engineers and IT specialists employed by more than 1,000 high-tech multinational companies based in Ireland. But construction workers — among them thousands of recent immigrants from Eastern Europe — are increasingly struggling to find work.

The last time unemployment rose so high was in May 1999, when 5.8 percent of the work force was jobless. Since then Ireland's jobs market has rapidly grown, attracting more than 200,000 foreign workers who now fill the bulk of new jobs, particularly in shops, restaurants and pubs.


On the Net:

Unemployment report, www.cso.ie/releasespublications/documents/labour_market/current/lreg.pdf