Friday, November 07, 2008
The Labor Department reported a sharp rise in unemployment during October to 6.5 percent and a decline of 419,000 in nonfarm payrolls over the last three months.
The unemployment rate jumped from 6.1 percent in September to 6.5 percent in October, the highest level since 1994, as the financial crisis continues to take its toll on the U.S. economy. During the early 1990s recession, unemployment peaked at 7.8 percent and rose as high as 10.8 percent in 1982.
Nonfarm payrolls declined by 240,000 in October, but revisions to the August and September data were huge. Job losses in August were revised from -73,000 to -127,000 and the September figure of -159,000 was revised to -284,000, the largest single month decline since October of 2001 after the terrorist attacks.
After ten months, the job loss total in 2008 now stands at 1.18 million.
By category, the declines were in all the usual places with manufacturing employment down by 90,000 including some 27,000 aerospace workers at Boeing who have since gone back to work. Construction employment fell by 49,000 and there were 45,000 fewer positions within professional and business services in October.
Employment at automobile dealers and department stores was reduced sharply, down 20,000 and 18,000, respectively, contributing to the loss of 67,000 trade-related jobs and the continuing impact of the credit crisis was seen in 24,000 fewer positions within the financial industry.
An unmistakable indication of the nation now being mired in a recession can be seen within the leisure and hospitality category where a total of 16,000 jobs were lost in October, more than 11,000 of these cutbacks occurring at restaurants and bars.
The only categories to add jobs in October were natural resources and mining, education and health care, and government. With mounting job losses in the private sector, employment in health care and government now account for almost one-third of all nonfarm payrolls.
The economic challenges facing the new president just became much more difficult.