Friday, November 06, 2009
The Labor Department reported that the unemployment rate in the U.S. hit its highest level since March of 1983, rising from 9.8 percent in September to 10.2 percent in October, as nonfarm payrolls saw a net decline of 190,000.
During the early 1980s recessions, the jobless rate peaked at 10.8 percent, a level that looks increasingly likely to be attained again sometime in the months ahead given the continuing reluctance of employers to hire.
The U-6 under-employment rate, which includes discouraged workers and those settling for part-time work instead of full-time work, rose to 17.5 percent, the highest level since this data series began 15 years ago.
Nonfarm payrolls saw declines in the usual areas - the construction, manufacturing, and trade categories all with net losses of over 60,000 in October.
Often considered a good barometer of the health of the economy because it provides an indication of how willing consumers are to spend, the leisure and hospitality category posted a net decline of 37,000 jobs, its third straight monthly decline after a small improvement in July.
Professional and business services payrolls increased by 18,000 due to a surge of 35,000 new temporary workers as other subcategories such as architecture and engineering showed job losses. While hiring of temporary help is a good sign for the economy, it is only a modest gain compared to the other declines.
Naturally, hiring continued in education and health services, what has been the only consistent source of job creation for many years now, as educational services had a net gain of 11,000 positions and health services added 34,000.
While it is clear that the worst of the job losses are now behind us, the fact that layoffs are still occurring at a much faster pace than workers are being hired back (i.e., pushing the unemployment rate higher) should be disconcerting to any of those thinking that the economic "recovery" is gaining significant traction.