Published November 06, 2009
Just hours after the government announced that the jobless rate topped 10 percent for the time since 1983, President Obama signed new legislation to provide additional unemployment benefits to Americans thrown out of work.
At a news briefing in the White House Rose Garden on Friday, Obama said the sobering national unemployment number -- 10.2 percent -- is regretful, and pledged to work hard to restore the struggling economy.
Nearly 16 million people are unemployed and the economy shed a net total of 190,000 jobs in October -- less than the downwardly revised 219,000 lost in September -- the Labor Department said Friday. August job losses were also revised lower, to 154,000 from 201,000.
"History tells us that job growth always lags behind economic growth," Obama said, noting a government report last week that said the economy grew at a 3.5 percent annual rate in the July-September quarter, the strongest signal yet that the economy is rebounding.
Obama said the $24 billion economic stimulus bill will extend jobless benefits for up to 20 additional weeks -- an extension that will help over one million Americans, he said.
He added that the bill will also extend tax credits for all home buyers, adding that his economic team is evaluating other options to create jobs and get the economy moving.
"I promise I won't rest until America is prosperous once again," he said.
The loss of jobs last month exceeded economists' estimates. It's the 22nd straight month the U.S. economy has shed jobs, the longest on records dating back 70 years.
Counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 percent, the highest on records dating from 1994.
The jobless rate rose to 10.2 percent from 9.8 percent in September. The jump reflects a sharp increase in the tally of unemployed Americans, which rose to 15.7 million from 15.1 million. That was much larger than the net loss of jobs, which is based on a survey of businesses.
Economists say it could climb as high as 10.5 percent next year because employers remain reluctant to hire.
"You need explosive growth to take the unemployment rate down," said Dan Greenhaus, chief economic strategist for New York-based investment firm Miller Tabak & Co.
Greenhaus said the economy soared by nearly 8 percent in 1983 after a steep recession, lowering the jobless rate by 2.5 percentage points that year. But the economy is unlikely to improve that fast this time, as consumers remain cautious and tight credit hinders businesses. In fact, many analysts expect economic growth to moderate early next year, as the impact of various government stimulus programs fades.
Many economists also worry that persistently high unemployment could undermine the recovery by restraining consumer spending, which accounts for 70 percent of the economy.
One sign of how hard it still is to find a job: the number of Americans who have been out of work for six months or longer rose to 5.6 million, a record. They comprise 35.6 percent of the unemployed population, matching a record set last month.
The employment report showed that job losses remain widespread across many industries. Manufacturers eliminated a net total of 61,000 jobs, the most in four months. Construction shed 62,000 jobs, down slightly from the previous month.
Retailers, the financial sector and leisure and hospitality companies all continued to reduce payrolls. The economy has lost a net total of 7.3 million jobs since the recession began in December 2007.
The average work week was unchanged at 33 hours, a disappointment because employers are expected to add more hours for current workers before they begin hiring new ones.
There were some bright spots in the report. Professional and business services companies added 18,000 jobs. And temporary employment grew by 33,700 jobs, after losing positions for months. That's a positive sign because employers are likely to add temporary workers before hiring permanent ones.
Still, economists expect jobs likely will remain scarce even as the economy improves. Diane Swonk, chief economist at Mesirow Financial, said that small businesses, a primary engine of job creation, still face tight credit and don't have the cash reserves to support extra workers.
And many companies are squeezing more production from their existing work forces. Productivity, the amount of output per hour worked, jumped 9.5 percent in the third quarter, the Labor Department said Thursday.
That's the sharpest increase in six years and followed a 6.9 percent rise in the second quarter. The increases enable companies to produce more without hiring extra people.
The Associated Press contributed to this report.