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what a great article. what's your take on it?
Jobless rate tops 10 pct. for first time since '83
Unemployment rate tops 10 percent for first time since 1983; 190,000 jobs lost in October
By Christopher S. Rugaber, AP Economics Writer
On 11:10 am EST, Friday November 6, 2009
WASHINGTON (AP) -- The unemployment rate has passed the psychological threshold of 10 percent for the first time since 1983 -- and is likely to go higher.
Nearly 16 million people can't find jobs even though the worst recession since the Great Depression has apparently ended. Persistently high unemployment could hurt the recovery by restraining consumer spending, which accounts for 70 percent of the economy.
The report showed that the nation faces a jobless recovery -- an economy that can't create jobs even though it is growing.
The unemployed rate jumped to 10.2 percent last month, 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 added about 4 points, while broader indexes were mixed.
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.
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.
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.
The Federal Reserve said earlier this week that it will keep a key interest rate at a record low level of nearly zero for an "extended period" to support the economy.
The central bank said economic activity has "continued to pick up," but Fed Chairman Ben Bernanke and his colleagues warned that rising joblessness and tight credit could restrain the rebound in the months ahead.
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 Ins ution, 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 Writer Jim Kuhnhenn contributed to this report.
what a great article. what's your take on it?
U6 is 17.5%.
http://www.bls.gov/news.release/empsit.t12.htm
U-6 unemployed, plus all marginally attached
workers, plus total employed part time for
economic reasons, as a percent of the civilian
labor force plus all marginally attached workers..
NOTE: Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and
are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached,
have given a job-market related reason for not looking currently for a job. Persons employed part time for economic reasons are those
who want and are available for full-time work but have had to settle for a part-time schedule. For more information, see "BLS
introduces new range of alternative unemployment measures," in the October 1995 issue of the Monthly Labor Review. Updated population
controls are introduced annually with the release of January data.
I always felt this is a more accurate number of unemployed.
Boy - it's a good thing Congress passed that "stimulus" bill huh.
Yes, it is.
Green jobs and another round of cash for clunkers will save us.
Would you prefer there be even more people without jobs?
WH, mindsets like this are the reason for the jobs saved and created claims.
and bankrupt AIG made a quarterly profit!
Productivity is also up (companies doing more stuff per employee).
Millions laid off, shareholders cheer the cost cutting.
Wage slaves get whipped more viciously, with no increase in pay, and shareholders cheer, too.
As employers reorganize/automate to do more with fewer employees, millions of jobs will not be returning.
WH, I'm curious to your stance as to the effectiveness of the stimulus package in saving jobs. We've talked about the measurement by economists but I'm not sure I've ever read how effective you actually feel its been.
How do you measure that?
what we need is another round of printing/borrowing a crapload of money to give it to sectors of the economy that no private group would dare to throw money at and construction projects that aren't needed.
The trend appears to be one of randomly picking a number and saying things would be worse by that much every time a new set of data comes out.
Hard to say b/c of the measurement issue. I wouldn't say the effect is negligible, but I wouldn't say it's pulled our bacon out of the fire either.
Thank god our President was an Ivy League intellectual gifted with an unmatched readi...err...speaking ability.
I'm sure he is doing the right things to save my jo...stimulate th....make me feel good.
I don't know about you all, but I myself am ready for my second stimulus package. At worst, third time is the charm. I'm sure the only people getting paid off in the earlier ones will eventually trickle dat cheddar down to my mailbox.
I think its fairly obvious it hasn't pulled our bacon out of the fire. Time will tell if it was enough, but I've seen nothing to suggest it has.
Do you believe in the long run we will be better off for having done it or not?
Are you working right now?
This person has 253 posts to your 47,280, so maybe he gets more work done than you.
Why are you so ing obsessed about people posting from work?
Are you posting from work?
Could be. I don't assume anything about the sustainability of the good already done.
Its not sustainable. There's no argument about that. As most economists I've read have pointed out, you're not going to see a bigger impact than you already have, but the spending will continue for some time now so it will continue helping for a decent amount of time. The hope of course is economic recovery before it runs out so that in effect the pump was primed.
In any event, I was surprised to find myself unknowing of your position earlier this morning considering how much this has been discussed in here.
I would go with U5. Some people desire just part time jobs. I guess I could be wrong, but I think U6 is counting people it shouldn't.
Are you guys making, "Woohoo America is in trouble and we're happy because we can blame it on the other party" signs yet?
I'm ambivalent about it. In my mind the only good justification is humanitarian -- wanting to give Americans a leg up in hard times. The economic justification looks pretty iffy to me.
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