FT reported that US unemployment rate climbed to a fresh 26 year high of 9.8% in September as the pain of recession continues to linger on the shoulders of American workers in spite of aggressive measures to stimulate the economy.
Official figures showed that non farm payrolls dropped by 263,000, making it the 21st consecutive month that the US economy has shed jobs. The data were worse than even the grimmest expectations, as economists predicted a 175,000 drop in payrolls, and followed a decline of a revised 201,000 jobs in August.
The US unemployment rate has more than doubled in the past two years and the number of people without jobs has risen by 7.6 million to 15.1 million since the recession began in December 2007. Few industries were spared job losses last month, with construction, manufacturing, retail and government agencies culling the highest numbers of workers. Only the education and healthcare sectors added jobs in September.
Hourly earnings ticked up by a penny to USD 18.67, but the average work week, a closely watched measure that signals future hiring, slid back to 33 hours. This remains close to a record low and economists suggest that an expansion in working hours will have to come before new hiring begins.
The labor department figures come as analysts project that the US economy grew at an adjusted annual rate of 3% in the just completed third quarter. Fears abound, however, over a jobless recovery, where companies that have become acclimated to operating with fewer workers are slow to begin rehiring and where employment lags the rest of the economy.
Mr Ben Bernanke chairman of Federal Reserve said that even if the economy expands at a rate of 3% that will not be enough to chip away at the unemployment rate, which is expected to rise above 10 per cent before falling back next year.
Meanwhile, other indicators have added to the argument that unemployment will remain stubbornly high. New jobless claims have been mounting at a clip of around 500,000 a week, the rebound in manufacturing activity appears to be sputtering and the latest Conference Board survey found that more people feel like jobs are hard to get.
(Sourced from Financial Times)
