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| US jobless rate rises to highest level since 1994 |
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Time is GMT + 8 hours
Posted: 8-Nov-2008 05:52 hrs |
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| Hundreds of people visit employment booths at a state sponsored job fair in Denver, Colorado. September 2008. The US unemployment rate rose to its highest level since 1994 in October, official data showed Friday, with analysts forecasting it to increase further in Barack Obama's first year as president. |
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The US October unemployment rate rose to its highest level since 1994, official data showed Friday, with analysts forecasting it to move even higher in Barack Obama's first year as president.. The Labor Department said the jobless rate rose to 6.5 percent as the world's largest economy shed 240,000 jobs during the month amid the credit squeeze and downturn.. "Employment has fallen by 1.2 million in the first 10 months. Over half of the decrease has occurred in the last three months," the department said in a statement.. The figures underlined the challenge for incoming US president Obama, who vowed Friday to tackle the economic crisis head-on and threw his support behind a new tax and spending stimulus package.. "One thing I can say with certainty is that we're going to need to see a stimulus package passed before or after inauguration," Obama said in his first post-election news conference, flanked by his team of economic advisers.. Analysts forecast that the jobless rate would climb above 7.0 percent next year after Obama's inauguration in January, with the peak seen about 7.5 percent in the middle to end of the year.. The US economy has shed jobs for 10 straight months in 2008 and the Labor Department revised losses in August and September sharply higher to 127,000 and 284,000 rather than the 73,000 and 159,000 estimated a month ago.. "(Job) losses should remain heavy for several more months," said economist Stephen Gallagher at investment bank Societe Generale in New York.. The data confirmed the severity of the economic downturn underway in the United States where months of turmoil on stock markets, tightening of credit and record-low consumer confidence have taken their toll.. The economy is widely seen as being in a recessionary cycle now and is forecast to contract over the whole of 2009.. President George W. Bush said in a statement that "monthly job report numbers ... reflect the difficult challenges confronting our economy" and he said existing government efforts would take time to materialize.. The White House has been wary of the idea of a second stimulus package after approving a 168-billion-dollar plan earlier this year and a 700-billion-dollar rescue program on October 3.. "The federal government has taken aggressive and decisive measures to address this situation," Bush said. "It will take time for these measures to have their full impact on an economy in which many Americans are struggling.". Democrats in Congress, fresh from electoral victories in Tuesday's election, are pushing for a new stimulus package, however, led by House of Representatives Speaker Nancy Pelosi.. Pelosi has called for the two-stage effort to involve a 60-100 billion dollar stimulus package in November, before the end of Bush's term on January 20.. "Most recent macroeconomic figures show a rapid pace of deterioration suggesting a deepening recession," said economist Amine Tazi at investment bank Natixis, commenting on the jobless data.. "The unemployment rate ... is likely to breach the 7.0 percent mark early next year," said Ian Shepherdson, an analyst at High Frequency Economics, who said the labor market report was "horrible in every way.". "It has already broken above the June '03 peak and the trend is rising almost vertically. Wages depressed too, up only 0.2 percent.". Given the turmoil, all eyes are on Obama's nomination for Treasury secretary, with Timothy Geithner, president of the Federal Reserve Bank of New York, on the list of possible candidates.. He has acted as an intermediary between the US Federal Reserve and the financial markets and played a key role in formulating measures to protect banks from the crisis.. An announcement is expected soon.. US stocks rallied Friday after two days of steep losses despite the grim jobs data.. The Dow Jones Industrial Average leapt 248.02 points (2.85 percent) to finish at 8,943.81 and the tech-heavy Nasdaq rose 38.70 points (2.41 percent) to 1,647.40.. The broad Standard & Poor's 500 index gained 25.87 points (2.86 percent) to 930.75.. "Stocks are looking past the dismal nonfarm payroll number and the highest unemployment rate since 1994 and are solidly higher, suggesting that recessionary conditions are somewhat discounted by the Street," analysts at Charles Schwab & Co. wrote in a client note. — AFP
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