Unemployment in U.S. Jumps to 10.2%

The unemployment rate in the U.S. soared to a 26-year high of 10.2 percent in October and employers cut more jobs than forecast, underscoring why Federal Reserve policy makers say interest rates will remain low until the labor market recovers.

Payrolls fell by 190,000 workers last month, figures from the Labor Department showed today in Washington. The jobless rate gained from 9.8 percent in September and exceeded 10 percent for the first time since 1983.

Companies such as Johnson & Johnson are cutting staff on concern the emerging recovery will be cut short as American consumers retrench. Fed policy makers this week said the economy will probably remain weak for a time” and reiterated a pledge to keep borrowing costs low for an extended period.”

Revisions added 91,000 from payroll figures previously reported for September and August.

Today’s report showed factory payrolls dropped 61,000 after decreasing 45,000 in the prior month. The decline included a gain of 4,600 jobs in auto manufacturing and parts industries.

Payrolls at builders declined 62,000 after a loss of 68,000 in September. Financial firms cut payrolls by 8,000, after 9,000 reductions the prior month.

Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 61,000 workers after cuts of 105,000 the prior month. Retail payrolls decreased by 39,800 after a decline of 44,200.

Government payrolls were unchanged from the prior month, the report showed.

The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- reached a record 17.5 percent from 17 percent in September.

Temporary workers rose by 34,000, the first gain since December 2007, when the recession began.

President Barack Obama in February signed into law a $787 billion stimulus package aimed at reviving growth and stemming job losses. The administration said last week that the plan was directly responsible for saving or creating about 640,000 jobs. Exit polling this week showed six in ten New Jersey voters and 55 percent of Virginians said Obama didn’t influence their vote.

Unemployment in U.S. Jumps to 10.2%

TradingEconomics.com, Bloomberg
11/6/2009 8:38:00 AM