Unemployment Rate at Highest in 26 Years

www.foxbusiness.com reports that, “the U.S. Labor Department said Friday employers cut more than 260,000 jobs from their payrolls last month and the nation’s unemployment rate hit 9.8%, the highest since 1983.”

The report casts doubt on the positive momentum the economy has been experiencing recently.
According to the Bureau of Labor Statistics, the nation’s economy lost a seasonally adjusted 263,000 jobs in September, considerably worse than the 175,000 jobs that economists had been expecting. The 0.1 percentage point rise in the unemployment rate was in line with estimates.

Today’s report comes at a time when most economic indicators are showing the nation’s economy in recovery; however some data, most notably manufacturing activity gauges, have shown that the recovery may be more muted that some on Wall Street had predicted.

A worse than-expected drop from the Institute for Supply Management’s manufacturing activity index helped fuel a 203-point drop in the Dow Thursday.

While the number was considerably worse than expected, it is still an improvement from the 700,000 monthly job losses the economy was shedding at the beginning of the year.

Nearly every major sector of the economy posted job losses in September, according to the Labor Department. Construction and manufacturing industries posted a combined 116,000 job loss while the service sector of the economy lost 147,000 jobs last month.

Government jobs, which are traditionally recession resistant, fell by 53,000 last month – mainly at the local level said Keith Hall, the commissioner of the BLS.

The only sector to post job gains were the education and health services industry, which saw employment rolls rise by a modest 3,000 people last month.

In a sign of how painful the labor market situation remains for millions of Americans, the Labor Department said that more than one-third of all unemployed have been jobless for six months or longer. The “total unemployment” rate, which included marginally-attached workers, involuntary part-time workers, now stands at 17% – nearly one in five workers.

Average hourly earnings were up $0.01 last month at $18.67.

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Economy Sheds 260,000 Jobs in September