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WASHINGTON : US unemployment jumped to double digits in October for the first time since 1983, reaching 10.2 percent, prompting renewed talk of additional stimulus for an economy struggling to emerge from recession.
Friday's Labor Department report, seen as one of the best indicators of economic momentum, showed job losses narrowed last month to 190,000.
The improvement was not enough however to prevent the jobless rate from surging to the first double-digit level for more than 26 years, from 9.8 percent in September.
President Barack Obama called the numbers "sobering" and said his administration was considering "further steps" to spark job growth.
"To that end, my economic team is looking at ideas such as additional investments in our aging roads and bridges, incentives to create jobs and steps to increase the flow of credit to small businesses," he said.
Christina Romer, who heads Obama's Council of Economic Advisers, said the report "contained both signs of hope for recovery and painful evidence of continued labor market weakness."
The jobless rate rise occurred even with a downward revision to the number of job cuts in the prior two months.
Non-farm payrolls fell by 219,000 in September (instead of the prior estimate of 263,000) and by 154,000 in August (revised from 201,000).
"The 10 percent figure will grab all the headlines, but from an analytical standpoint the report is not as bad as last month's," said Cary Leahey, senior economist at Decision Economics.
"But if you're a politician in Washington of the Democratic variety, this is far worse than last month."
Leahey said although job losses have narrowed, the improvement appears to have stalled.
"This report is a soft start to the fourth quarter," he said. "It is consistent with a double-dip (recession) or W-shaped recovery."
Robert MacIntosh, economist at Eaton Vance, said the overall report was "not all that bad," with revisions but that "the headline of 10 percent was huge psychologically."
MacIntosh said if current trends continue, the economy could see job gains in January or February but that unemployment may rise with labor force and population growth.
"This means a slower, more frustrating economic recovery," he said.
Overall, the monthly report was worse than expectations for a 10 percent jobless rate and 175,000 job losses despite the improving trend.
"The headline number of 10.2 percent will be shouted from the mountaintops and from the voters," said Andrew Busch, analyst at BMO Capital Markets.
"The Federal Reserve and the US Treasury are in the glare of the klieg lights to get something done to arrest the job losses."
The number of unemployed persons increased to 15.7 million. Since the start of the recession in December 2007, the number of unemployed has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points, the Labor Department said.
The goods-producing sectors shed 129,000 jobs in the month including 61,000 in manufacturing and 62,000 in construction. Services lost 61,000 in the month, with 40,000 in retail.
The report showed modest employment gains in professional and business services of 18,000, and 45,000 jobs added in education. Government employment was flat.
Aggregate hours worked in the private sector, sometimes seen as a proxy of economic activity, fell by 0.2 percent. But hourly earnings rose 0.3 percent, helped by a rise in overtime work.
Nigel Gault, economist at IHS Global Insight, said there were "glimmers of hope" in the report, including a gain of 34,000 temporary jobs and increases in manufacturing overtime.
"We expect job declines to continue to ease, since we expect that productivity gains will slow, and firms will find that they must bring in new workers to keep output growing," Gault said.
The world's largest economy grew at a seasonally adjusted 3.5 percent annual rate in the July-September period. The increase was the first since the second quarter of 2008.
- AFP/ir
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