Jobless Rate Jumps To 10.2%

This historic recession has now pushed the U.S. economy to an unemployment rate above 10% as businesses continue to slice jobs in a weak economic environment.  

The Labor Department said Friday that the U.S. economy lost a seasonally-adjusted 190,000 nonfarm jobs during the month of October, narrowing the loss of 263,000 jobs in September.

The losses pushed the nation’s unemployment rate from 9.8% to 10.2% - teh highest unemployment rate since August 1983.

Both the numbers were considerably worse than expected by economists, who were looking for the report to show a loss of 175,000 jobs last month and the unemployment rate to rise to 9.9%.

“The declines are much smaller and less widespread than they were last fall and winter,” said Keith Hall , the commissioner of the Bureau of Labor Statistics, who produces the report.  “Nevertheless, some industries are still experiencing notable employment declines.”

While traditionally the unemployment rate will continue to rise after a recession is declared over, nearly all economists considered the 10% mark an inevitability, it is considered a psychological blow to both Main Street and U.S. government officials. 

Unemployment is the number that Main Street and Washington watch more closely than any other economic indicator. When the Obama Administration released its economic stimulus package at the beginning of the year, the Administration was looking for an unemployment rate closer to 8%.

“What we have seen so far is a GDP and productivity economic recovery,” said Stuart Hoffman, chief economist with PNC Financial. “This unemployment rate makes an average person on the street, who looks at the economy in terms in jobs, ask, ‘Where is the recovery?’”

Looking at broader measures of how unemployment can be defined, the picture looks even bleaker than 10.2% official unemployment rate. The "total unemployment" rate, which includes marginally-attached workers and involuntary part-time workers, now stands at 17.5%.

According to the Labor Department, the monthly job losses were fairly widespread with education, health, professional and business services showing slight gains during the month.

The construction field lost 62,000 jobs last month, while the nation’s manufacturers cut 61,000 jobs. Retailers cut 40,000 jobs and the leisure and hospitality industries cut 37,000 jobs.

The professional and business services industry, a sector closely watched because it tends to product good-paying, high-quality jobs, did add 18,000 jobs last month, the first time this year. Education and health services, a recession resistant sector, added 45,000 jobs. Government jobs were unchanged.

October average hourly earnings rose 5 cents to $18.72 while the average hours worked was unchanged at 33.0 hours.