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U.S. Unemployment Rate Hits 10 Percent
By Christopher S. Rugaber, AP Economics Writer
Manufacturing.Net - November 06, 2009

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WASHINGTON (AP) -- The unemployment rate has hit double digits for the first time since 1983 -- and is likely to go higher.

The 10.2 percent jobless rate for October shows how weak the economy remains even though it is growing. Rising unemployment also could threaten the recovery if it saps consumers' confidence and makes them more cautious about spending as the holiday season approaches.

Nearly 16 million people can't find jobs even though the worst recession since the Great Depression has apparently ended.

The unemployed rate jumped to 10.2 percent, the highest since April 1983, from 9.8 percent in September, the Labor Department said Friday. The economy shed a net total of 190,000 jobs, more than economists had expected.

The number of unemployed hit 15.7 million, up from 15.1 million. The job losses occurred across most industries, from manufacturing and construction to retail and financial. The job-loss total is based on a survey of businesses, separate from a survey of households that produces the unemployment rate.

Economists say the unemployment rate could reach 10.5 percent next year because employers remain reluctant to hire.

"It's a stark reminder of how much work remains to be done to get people back to work," Christina Romer, head of President Barack Obama's Council of Economic Advisers, acknowledged in an interview with The Associated Press.

Some positive signs emerged in the data, Romer said, pointing to a 34,000 increase in temporary service jobs.

"That's often the first sign of firms kind of dipping their toe back into hiring people," she said.

Still, counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 percent, the highest on records dating from 1994.

"It's not a good report," said Dan Greenhaus, chief economic strategist for New York-based investment firm Miller Tabak & Co. "What we're seeing is a validation of the idea that a jobless recovery is perfectly on track."

Friday's report is the first since the government said last week that the economy grew at a 3.5 percent annual rate in the July-September quarter, the strongest signal yet that the economy is rebounding. But that isn't fast enough to spur rapid hiring.

"You need explosive growth to take the unemployment rate down," Greenhaus said in an interview Thursday.

The economy soared by nearly 8 percent in 1983 after a steep recession, Greenhaus said, lowering the jobless rate by 2.5 percentage points that year. But the economy is unlikely to improve that fast this time, as consumers remain cautious and tight credit hinders businesses. In fact, many analysts expect economic growth to moderate early next year, as the impact of various government stimulus programs aimed at home and car buying fade.

The stock market seesawed in early trading. The Dow Jones industrial average dipped about 2 points, while broader indexes also edged down.

High unemployment is likely to become a political liability for Obama and Democrats in Congress. Most economists expect the jobless rate will remain above 9 percent through next November, when congressional elections are held. When unemployment topped 10 percent in the fall of 1982, President Ronald Reagan's Republican Party lost 26 seats in the House.

Republicans and Democrats on Capitol Hill traded blame over the unemployment figures.

Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee, said the economy would have been much worse had congressional Democrats not approved Obama's $787 billion stimulus package in February.

Republicans countered that Obama's focus on increased spending was making things worse.

"More debt, more spending ... clearly has not worked -- particularly in a time of double-digit unemployment," said Senate GOP Leader Mitch McConnell of Kentucky.

One sign of how hard it still is to find a job: The number of Americans who have been out of work for six months or longer rose to 5.6 million, a record. They account for 35.6 percent of the unemployed population, matching a record set last month.

Congress sought to address the impact of long-term unemployment this week by approving legislation extending jobless benefits for the fourth time since the recession began. The bill would add 14 to 20 extra weeks of aid and is intended to prevent almost 2 million recipients from running out of unemployment insurance during the upcoming holiday season. Obama is expected to quickly sign the legislation.

October was the 22nd straight month the U.S. economy has shed jobs, the longest on records dating back 70 years. The report showed job losses remain widespread across many industries. Manufacturers eliminated a net total of 61,000 jobs, the most in four months. Construction shed 62,000 jobs, down slightly from the previous month.

Retailers, the financial sector and leisure and hospitality companies all continued to reduce payrolls. The economy has lost a net total of 7.3 million jobs since the recession began in December 2007.

The average work week was unchanged at 33 hours, a disappointment because employers are expected to add more hours for current workers before they begin hiring new ones.

There were some bright spots in the report. Professional and business services companies added 18,000 jobs. And temporary employment grew by 33,700 jobs, after losing positions for months. That's a positive sign because employers are likely to add temporary workers before hiring permanent ones.

"That is always in our business a precursor to more permanent jobs becoming available," said Tony McKinnon, president of Management Recruiters International, an executive recruiting firm.

Still, economists expect jobs likely will remain scarce even as the economy improves. Diane Swonk, chief economist at Mesirow Financial, said that small businesses, a primary engine of job creation, still face tight credit and don't have the cash reserves to support extra workers.

And many companies are squeezing more production from their existing work forces. Productivity, the amount of output per hour worked, jumped 9.5 percent in the third quarter, the Labor Department said Thursday.

That's the sharpest increase in six years and followed a 6.9 percent rise in the second quarter. The increases enable companies to produce more without hiring extra people.

While the unemployment rate hasn't yet topped the post-World War II high of 10.8 percent set in December 1982, many experts say this recession is worse.

The work force, on average, is older now as the baby boomers have aged and fewer teenagers are out looking for work. Gary Burtless, an economist at the Brookings Institution, notes that older workers are more likely to be employed than younger ones. As a result, it takes a tougher job market to push the rate to 10 percent.

"This may be the toughest employment situation we've seen in the postwar era," Mark Gertler, an economics professor at New York University, said in an interview earlier this week.

Associated Press Writers Jim Kuhnhenn and Anne Flaherty contributed to this report.


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Soooo...  11/6/2009 11:54:00 AM
Out of work and on the government dole. ARE WE STIMULATED YET?
Just got emergency unemployment  11/6/2009 12:07:00 PM
This is 80% of my original benefits. It keeps me in the numbers so people can see how many unemployed there are. If I hadn't gotten this, I would have survived, but I would have become an uncounted statistic.
Fundamentally, manufacturing not competitive.  11/6/2009 12:13:00 PM
The global unemployment is also up. In the USA, in the last decade the financial sector created a lot of "illusionary" wealth. The best and brightest young people went into finance, but they do not produce anything. Now the illusion is gone, it is back to manufacturing. US manufacturing was stagnant and now we are not competitive. The result is unemployment and trade deficits. If we do not strengthen our manufacturing technology, things can only get worse.
Explosive growth required ....  11/6/2009 12:14:00 PM
and the only thing I can see exploding is the deficit.
Implement the FairTax!  11/6/2009 12:40:00 PM
We need to get the FairTax implemented and watch jobs flood back into this country!
Underemployment Numbers  11/6/2009 12:41:00 PM
Would be useful to know the underemployment numbers, not just unecmployed and partially employed (underemployment would also include people who are working, but in jobs which are stopgaps due to loss of another job or other job thy are trained for). Underemployment adds several percentage points to the numbers usually and is a better reflection of reality.
NUTZ!  11/6/2009 12:45:00 PM
I knew we should have given OBAMA $100 Gazillion instead of that measly $700BB. THAT would have held unemployment down to 8%. Honest! Look....if you don't grow it, mine it or make it, you are NOT doing anything to make this economy grow. BARACK! That includes making BS promises! How you likin' THIS change now????
Fuzzy Math  11/6/2009 1:00:00 PM
Was that 10.2% unemployment Rate or a 10.2 Trillion Deficit, just ask Jimmy II, I am sure he can explain(spin) all of this was not his fault..His Health care plan will fix all of this numbers, because, he can do anything, and we are going to be getting a big Christmas present this year too..and next year you will get the bill for it..
ISM Tonic  11/6/2009 1:02:00 PM
Labor is mad and management hates labor. Politicians lie about most everything. Farmers don't trust any of them. 1948 Harding cartoon is right. Drink your "ISM Tonic" and let the government run your life. Just sign away your freedoms. Labor gets less wages and can't bargain. Management gets no profits since it all goes to the government. Farmers profits go to the common good as does their seeds. Everyone gets screwed in the end, but no one saw that coming in the last election. How soon will we wake up and smell the decay of America? Soon I hope. At least before ALL my hard earned money is spent before I even see it. Government can't run their own business. What made everyone think OBAMA knew what he was doing when he took over everything from banks to car making. Health care is next.
The overall market has shrunk  11/6/2009 1:10:00 PM
The overall market has shrunk. It will take a long time to catch up to the 2006 pre Nancy Pelosi and the Democrats market destruction moves in order to elect their guy in office. Was it worth it ? Do those who reluctantly voted form him still feel as "proud" as you felt last November? Or are you now having buyer's remorse?
Unemployed  11/6/2009 1:17:00 PM
Aren't we lucky that Obama got elected? Isn't he making everything better? Soon none of us will have to work. We will all just get our money from the government! They can print as much as they want, and all we have to do is keep reelecting him. We have may have to change a few pesky laws to do it - term limits for example, or we could just coronate him king of the world and live happily ever after.
Re:Fundamentally, manufacturing not competitive.   11/6/2009 1:41:00 PM
I completely agree with your statement of “illusionary” wealth. You can’t eat, drive, or live inside a dollar bill. However, if we keep printing money to fuel these insane stimulus packages, a dollar bill maybe useful for shredding it up and insulating the walls of you house. Maybe we should ask the US mint to start adding fire retardant in their dollar bill paper, just in case. If the government would simply abandon all these business killing initiatives (health care and energy cap & trade), then the economy will begin to come back simply due to the “hope and change” that investors in manufacturing would begin to feel. However, I think until a few more Americans are convinced that we are heading in the wrong direction, we will need to endure some rough times.
WHAT A MESS GWB  11/6/2009 1:49:00 PM
Too bad we can't bring that idiot GWB back with his cast of clowns so that they could clean up their own mess, rather than making the first intelligent administration since Roosevelt take the heat for them. Two unresolved "wars", treasury surpluses turned into deficits, health care costs tripling in 8 years, and 1 trillion dollars spent looking for a shadow- Osama Bin Ladin. Is there anything else that GWB could have screwed up?
READ His Lips! No unemployment over 8.5%  11/6/2009 2:31:00 PM
That type of statement was the down fall of Bush I. It could prove to be the down fal of Presidnet Obama as well. The American people have a short memory when it comes to itmes such as this. But with the economy in such dire straits as it is, they will no forget this. He will have to pull a rabbit out of his hat to overcome this issue. 15 million voters is a lot of voters. It is likely that some of these voters will be out of work for years as well. Good luck to him
Curiously enough, there's a time for printing $  11/6/2009 2:34:00 PM
In the past quarter century, economists have found that monetary policy is quickest in stablizing boom and bust cycles. Cutting back the money supply puts inflation in check. However, in an recession, the money supply is too tight. So money has to be easied up, and lowering interest rates (can't go below zero) and printing money helps to replenish the money supply, needed for business investments. Stimulus and easy money are TEXT BOOK METHODS to fight recession, and the whole world is using that. When recovery is in full swing, then the extra money is reabsorbed into the FED, to forestall inflation. THAT IS WHAT THE TEXT BOOK SAYS. The major economies in the world are following the text book and that is working just fine.
Huh?  11/6/2009 2:52:00 PM
All the predicable anti-government comments are here. Don't understand why all the anger at the government and none at corporations who take their jobs overseas but pay their execs obscene salary and bonuses. Government is not the only problem here. Also, where was all this anger when trillions were being spent on 2 wars, 1 of which was completely unnecessary?
Re: Curiously Enough,...  11/6/2009 3:48:00 PM
The problem with the text book method is that there is a strong possibility of rampant inflation. This coupled with a stagnant jobs market could bring us back to the late 1970's. High inflation, High interest rates, High unemployment. Not a pretty picture.
Bush or Obama - does it matter?  11/6/2009 3:59:00 PM
Bad fiscal policy is bad fiscal policy, it does not matter who is sitting in the White House. Does it make any sense to anyone those policies in which you tax successful businesses just so you can redistribute the money back to people to buy products from those same businesses? That is what our government is doing. Worse, they are picking which businesses get the business of their “incentives”. Free Market is the ultimate Democracy. Government sponsored “bubbles” are a bad idea! What economic calamity will need to happen for the majority of Americans to realize this?! Hold on for a wild ride!
THIS IS OBAMA'S MESS - PERIOD  11/6/2009 4:34:00 PM
Sane programs would have improved the economy already. Obama's insane spending and tax increases have made the situation worse. Investors won't make a move in this regualator and taxing climate.
Economic Stimulus?  11/6/2009 5:23:00 PM
If democrats were really interested in stimulating the economy they would encourage bringing manufacturing back into the United States with tax incentives to companies that do so. Let's face the facts: China generally produces junk. They don;t care about quality, ethics, or human life. We dump our hard-learned manufacturing knowledge on them to exploit their cheap labor market. The end result of all this is that our factories are shuttered and the jobs sent overseas. The people that used to work in good paying factory jobs here are now unemployed and forced to take anything and usually for a fraction of what they used to make. The problem with democrats is that they have a compulsion to spend, spend, and spend. This 'stimulus bill' is just that. Once the money in the bill is exhausted, the jobs they pretend to have saved will dry up. Part of the 'stimulus bill' has added an additional $100 per month to my unemployment compensation, which by the way I'll end up paying taxes on. The bill also pays for 2/3 of my monthly Cobra health benefits (for a maximum of 9 months). Although these two items will provide a modest benefit, they will end once the money dries up. The two items I listed will do NOTHING to help me get a job. The reason why the stimulus bill is such a dismal failure is that it only provides for service jobs. A service-oriented economy will ALWAYS FAIL. Wealth can only be created in jobs that add value to raw resources (read: agriculture, commercial construction, and manufacturing). Barry obama promised to the democrat-infested Congress that unemployment would not exceed 8% if the stimulus package was passed. Democrats brainlessly approved the package (exceeding 800 pages in length) in just a few weeks. It is absolutely impossible for ANY human being to comprehend that much information in such a short amount of time. The Republicans knew this and with the exception of three RINOs voted entirely against it. The stimulus bill is a democrat failure. Unemployment exceeding 10% is a shining example of the blatant lie that obama told. It also illustrates that obama and the democrats know absolutely NOTHING about the economy.
Unemployment...  11/6/2009 7:10:00 PM
Barrack Huesein Obama, he is the leader, uuuuuhuh uuuhu...singing Barrack Huesien Obamaaaah, uuuhuh uuhuh. Hope there is change left in your pockets.
Predictable Stupidity  11/6/2009 8:44:00 PM
Want to know why we're screwed? Read Economic Stimulus? and the rest of these neocon comments and everything will become crystal clear for you.
FAIR TAX  11/9/2009 7:02:00 AM
A tax plan developed by economists and scholars instead of politicians is the only way out of this mess.
BHO show us what you know!  11/9/2009 5:36:00 PM
Come on President Obama. You can fix everything just like you promised and prove all of the comments above wrong! Show us there is reason that your Economic Stimulus packages and other wastes of tax payer money aren't as foolish as they appear to be!
Too many lawyers  11/9/2009 7:36:00 PM
One reason manufacturing won't come back here is that anyone in small business who manufactures anything in the USA is a perfect target for law suits. Just look at the number of lawyers in your phone book. Almost every one of them is only looking to sue someone who produces stuff. Most cannot afford to go to court and defend themselves, so they just settle. It is a form of extortion, and it keeps the lawyers well funded enough that they are the only ones that can afford to run for congress or the senate. Then they exempt themselves from social security and Obama's health care, and if they serve one term, their retirement is worth millions. You want manufacturing back? Make it just as risky to file a frivolus suit as it is to defend one. You will be hard pressed to find a lawyer who will defend you on a contingency!


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