Top News

Jobless Rate Hits 10.2%


The U.S. unemployment rate jumped from 9.8% to 10.2% in October, the U.S. Bureau of Labor Statistics reported on Nov.6. That rate exceeds economists' estimates of 9.9% and is the highest since April 1983. Nonfarm payroll employment declined by 190,000, more than the 175,000 jobs that economists had forecast. The largest job losses in October were in construction, manufacturing, and retail. The economy lost 219,000 jobs in September, revised from a previous estimate of 263,000. In the last three months, job losses have averaged 188,000 per month, compared with an average of 357,000 during the prior three months. While the rate of job loss is slowing, the recession has had a devastating impact on the job market. Since December 2007, employers have shed 8.2 million jobs, sending the unemployment rate up 5.3 percentage points. The ratio of job cuts to losses in gross domestic product, or GDP, in this recession has surpassed the historical norm. "Employment may be a lagging indicator, but job losses should have abated by now even if a lot of new jobs are not being added," says Peter Morici, professor at the Smith School of Business at the University of Maryland. Report Has Some Bright SpotsOngoing cuts indicate that the U.S. job market could threaten economic recovery, some economists say. "This recovery is shaping up to be a jobless one, just like the last two," says Paul Ashworth, an economist with Capital Economics in Ontario. "Our concern is that, unlike the last recovery, with credit still tight, households aren't going to be able to smooth their consumption using credit until the labor market eventually strengthens." There were some bright spots in the report. Health-care employment continued to increase in October, adding 29,000 jobs. Since the beginning of the recession, health care has added 597,000 jobs. The temporary help sector, often considered a harbinger of an improving economy, added 34,000 jobs in October. The trend marks a reversal from January 2008 through July 2009, when the sector lost an average of 44,000 jobs per month. "Temporary jobs aren't the type of positions that you want to see being created in an economy further into a recovery," says Ashworth. "But at this early stage of the cycle, that rebound in temporary jobs suggests employers will be adding extra permanent positions over the next few months." Hard-Hit Sectors: Construction, ManufacturingConstruction employment decreased by 62,000 in October, with the losses concentrated in nonresidential specialty trade contractors and in heavy construction. Since December 2007, employment in construction has fallen by 1.6 million. However, monthly job losses in construction have slowed to an average of 67,000 during the most recent six months, compared with an average decline of 117,000 during the previous six months. Manufacturing lost 61,000 jobs in October, bringing total job losses in that sector to 2.1 million since December 2007. Over the last four months, job losses in manufacturing have averaged 51,000 per month, compared with an average monthly loss of 161,000 from October 2008 through June 2009. Retail lost 40,000 jobs in October, with declines concentrated in sporting goods, hobby, book, and music stores, and in department stores.
0115_moira_herbst_bio
Herbst is a reporter for BusinessWeek.

Video Game Avenger
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus