The US has suffered its 10th consecutive month of job losses due to the credit crunch and economic downturn. The situation is likely to get worse before it gets better, a huge challenge for president-elect Barack Obama.
The US unemployment rate rose to its highest level since 1994 in October, the government said Friday, reaching 6.5 percent as the world's largest economy shed jobs amid the credit squeeze and downturn.
The Labor Department said 240,000 jobs had been cut in October, the 10th straight month of job losses, and it revised figures for August and September sharply higher.
These revisions -- 127,000 and 284,000 jobs were lost in August and September rather than the 73,000 and 159,000 estimated a month ago -- helped push up the unemployment rate.
The latest data confirm the severity of the economic downturn underway in the United States where months of turmoil on stock markets, tightening of credit and record-low consumer confidence have taken their toll.
"Employment has fallen by 1.2 million in the first 10 months. Over half of the decrease has occurred in the last three months," the department said in a statement.
The figures also underline the challenge for incoming president Barack Obama, who was to meet Friday with his economic team before giving his first post-election news conference.
Given the turmoil, all eyes are on the Democrat's nomination for Treasury secretary, with former treasury secretary Larry Summers, ex-Federal Reserve chief Paul Volcker and Laura Tyson, chairwoman of the National Economic Council under president Bill Clinton, in the running for the job.
"The unemployment rate ... is likely to breach the 7.0 percent mark early next year," said Ian Shepherdson, an analyst at High Frequency Economics.
"It has already broken above the June '03 peak and the trend is rising almost vertically. Wages depressed too, up only 0.2 percent.
"In short, horrible in every way."
On Thursday, US stocks were hammered for a second day in a row as global markets plunged on fears of a deep worldwide recession, with the Dow Jones industrials losing more than 900 points in the two sessions.
The dismal jobs report was expected to weigh on Friday's trade.
The International Monetary Fund had forecast Thursday that advanced economies would contract next year for the first time since World War II and called for government spending to battle the global financial crisis.
The US economy was forecast to contract by 0.7 percent in 2009.
Momentum for a tax and spending plan to boost the flagging US economy is growing following the election of Obama, who expressed support for a stimulus package during the campaign.
House of Representatives Speaker Nancy Pelosi said in an interview published in The Wall Street Journal on Friday that a new stimulus package should come in two parts.
Pelosi called for the two-stage effort to involve a 60-100 billion dollar stimulus package in November.
The California Democrat urged Congress to work together with the White House in the last days of President George W. Bush's term to pass the measure, the second such plan after a 150-billion package was adopted in February this year.
Date created : 2008-11-07