Jobless rate tops 10% for first time since 1983
Fri 06 Nov 2009
Reporting from Washington — The nation's unemployment rate surged to 10.2% in October, reaching double digits for the first time in 26 years, the Labor Department reported today.
The unexpected sharp increase, from 9.8% in September, came as employers dropped 190,000 workers from their payrolls last month. That was larger than the 175,000 job losses that most forecasters were expecting for the month, and it underscored just how dire the labor market remains despite the recent upturn in the nation's economic output.
Unemployment had been steadily rising in recent months, but the double-digit figure is likely to have a major psychological effect as well as potentially significant consequences in Washington.
"It's an important political threshold," said Robert Reich, the former Labor secretary in the Clinton administration who now teaches at the UC Berkeley. With the midterm elections looming next year, he said, "the 10% is going to give Republicans more ammunition to criticize the [Obama] administration and force the hand of the administration to at least appear to be taking additional steps to remedy the situation."
In fact, White House aides, in apparent anticipation of the bad statistical news, said President Obama was scheduled this morning to sign a bill that would extend jobless benefits to the long-term unemployed and expand tax-relief programs for home buyers and businesses operating at a loss.
The last time the jobless rate crossed double digits was during the recession and initial recovery period of the early 1980s. Then, unemployment hit 10.1% in September 1982 and stayed at or above that level, rising to a high of 10.8%, until June the following year. In the midterm election in November 1982, then-President Reagan and the Republicans lost control of the House.
This time around, unemployment has risen even faster and, by some analysts' reckoning, could hover around 10% for much longer. The jobless rate at the start of this year was 7.6% and it was a mere 4.9% in late 2007, when the latest recession officially began. Since then, the number of unemployed workers has increased by 8.2 million to 15.7 million as of October, according to figures compiled by the Bureau of Labor Statistics.
The labor situation is actually worse than what these figures and the 10.2% rate show. The government doesn't count as officially unemployed the so-called discouraged workers who have given up looking for jobs which in October numbered 808,000, up from 484,000 a year earlier. There were also 9.3 million people who reported they had little choice but to work part time because their hours had been cut or they could not find full-time jobs. If this group and discouraged workers are included, along with others on the fringe of the labor market, the nation's unemployment and underemployment rate in October was 17.5%.
The unemployment rate is estimated based on the government's monthly survey of about 60,000 households. A separate survey of about 160,000 private and public employers which many analysts consider more revealing of the job market trends -- showed an employment loss of 190,000 jobs in October.
Since late 2007, payroll employment has fallen by about 7.3 million. Manufacturing and construction have taken the biggest hits, and those industries continued to shed jobs in October. Factory payrolls fell 61,000 over the month, and construction lost 62,000 jobs.
The retail sector, heading into the holiday season, trimmed 40,000 positions last month.
Healthcare employment rose 29,000 over the month. And in a potentially significant sign, the temporary-help industry, usually a harbinger of broader hiring, added 34,000 jobs last month.
The unexpected sharp increase, from 9.8% in September, came as employers dropped 190,000 workers from their payrolls last month. That was larger than the 175,000 job losses that most forecasters were expecting for the month, and it underscored just how dire the labor market remains despite the recent upturn in the nation's economic output.
Unemployment had been steadily rising in recent months, but the double-digit figure is likely to have a major psychological effect as well as potentially significant consequences in Washington.
"It's an important political threshold," said Robert Reich, the former Labor secretary in the Clinton administration who now teaches at the UC Berkeley. With the midterm elections looming next year, he said, "the 10% is going to give Republicans more ammunition to criticize the [Obama] administration and force the hand of the administration to at least appear to be taking additional steps to remedy the situation."
In fact, White House aides, in apparent anticipation of the bad statistical news, said President Obama was scheduled this morning to sign a bill that would extend jobless benefits to the long-term unemployed and expand tax-relief programs for home buyers and businesses operating at a loss.
The last time the jobless rate crossed double digits was during the recession and initial recovery period of the early 1980s. Then, unemployment hit 10.1% in September 1982 and stayed at or above that level, rising to a high of 10.8%, until June the following year. In the midterm election in November 1982, then-President Reagan and the Republicans lost control of the House.
This time around, unemployment has risen even faster and, by some analysts' reckoning, could hover around 10% for much longer. The jobless rate at the start of this year was 7.6% and it was a mere 4.9% in late 2007, when the latest recession officially began. Since then, the number of unemployed workers has increased by 8.2 million to 15.7 million as of October, according to figures compiled by the Bureau of Labor Statistics.
The labor situation is actually worse than what these figures and the 10.2% rate show. The government doesn't count as officially unemployed the so-called discouraged workers who have given up looking for jobs which in October numbered 808,000, up from 484,000 a year earlier. There were also 9.3 million people who reported they had little choice but to work part time because their hours had been cut or they could not find full-time jobs. If this group and discouraged workers are included, along with others on the fringe of the labor market, the nation's unemployment and underemployment rate in October was 17.5%.
The unemployment rate is estimated based on the government's monthly survey of about 60,000 households. A separate survey of about 160,000 private and public employers which many analysts consider more revealing of the job market trends -- showed an employment loss of 190,000 jobs in October.
Since late 2007, payroll employment has fallen by about 7.3 million. Manufacturing and construction have taken the biggest hits, and those industries continued to shed jobs in October. Factory payrolls fell 61,000 over the month, and construction lost 62,000 jobs.
The retail sector, heading into the holiday season, trimmed 40,000 positions last month.
Healthcare employment rose 29,000 over the month. And in a potentially significant sign, the temporary-help industry, usually a harbinger of broader hiring, added 34,000 jobs last month.