Unemployment hits 10.2%

**Prince** · 11-06-2009, 08:49 AM

Unemployment hits 10.2%

The unemployment rate spiked to its highest level since 1983, much worse than expected as employers continue to trim jobs despite other signs of growth.

NEW YORK (CNNMoney.com) -- The nation's unemployment rate rose above 10% for the first time since 1983 in October, a much worse jump than expected as employers continued to trim jobs from payrolls.

The reading, reported by the government Friday, is a sign of the continued weakness in the labor market even though the economy grew in the third quarter following the longest and deepest downturn since the Great Depression.

The government reported that the unemployment rate spiked to 10.2%, up from 9.8% in September. It is the highest that this rate has been since April 1983. Economists had forecast an increase to 9.9%.

There was also a net loss of 190,000 jobs in October, according to the Labor Department, an improvement from a revised estimate of 219,000 job losses in September. However, economists surveyed by Briefing.com had forecast a loss of only 175,000 jobs in October. This was the 22nd straight month of job losses.

"The only good news is the number of layoffs are dropping off, but those who are laid off still aren't finding jobs," said David Wyss, chief economist with Standard & Poor's.

The jump in the unemployment rate was driven up by a large drop in the number of people who describe themselves as self-employed, as well as the number of teenagers who have jobs. The unemployment rate for teenagers in the labor force soared to 27.6%, up 1.8 percentage points and hitting a third straight record high.

Both teen workers and the self-employed are not captured very well in the government's separate survey of employers that is used to calculate the number of people on U.S. payrolls. That explains much of the disconnect between fewer job losses overall and the much worse unemployment rate.

The rise in unemployment was not spread evenly across the population. For those with college degrees, the unemployment rate fell to 4.7% from 4.9% in September, as the unemployment rate for those in management, professional, and related occupations slipped to 4.7% from 5.2%.

But the unemployment rate for production jobs, such as factory workers, jumped to 14.5% from 14.1%. The jobless rate for workers in construction, maintenance or natural resources industries such as mining rose to 15.5% from 14.3%.
0:00 /3:08Real unemployment really bad

"There's a real mismatch between the unemployed people out there compared to what job openings are available," said John Silvia, chief economist with Wells Fargo Securities. He said construction workers who lost a job when the housing bubble burst don't have the skills to compete for jobs in sectors that are hiring, such as health care and technology.

Government efforts to end job losses have had limited effects, although the Obama administration estimated last month that 640,000 jobs were created or saved by the federal stimulus package passed earlier this year. But that's modest compared to the 7.3 million jobs that have been lost since the start of 2008.

Christina Romer, chair of the President's Council of Economic Advisors, said the steady decline in monthly job losses since earlier this year is a hopeful sign for the economy.

But she acknowledged there's still significant pain for those looking for work. "Having the unemployment rate reach double-digits is a stark reminder of how much work remains to be done before American families see the job gains and reduced unemployment that they need and deserve," she said.

Friday's report comes one day after Congress voted overwhelmingly to extend unemployment benefits by up to 20 weeks. There are now a record 5.6 million people who have been unemployed for six months or longer, as the average time an unemployed person has been out of a job hit 26.9 weeks.

Prior to this report, most economists had believed that the unemployment rate would keep rising and that job losses would continue into next year. But the jump in unemployment in October took it to levels worse than what many previously had expected to be the peak.

According to a survey of top forecasters by the National Association of Business Economics last month, the consensus estimate among economists was that unemployment would hit a high of 10% in the final three months of this year and the first quarter of 2010.

The five economists with the most bearish forecasts had expected unemployment to rise to 10.2% in the fourth quarter of this year before hitting 10.5% in the first half of next year.

Wyss is one of those economists who had projected an unemployment rate of 10.5% in the middle of next year. He said Friday's report may force him to raise his worst case estimate.

"Some things aren't playing out the way I expected them to," he said. "There's just no good news in this report."

But others said they see some early signs of life for the labor market. Sung Won Sohn, economics professor at California State University Channel Islands, noted that the biggest increase in temporary employees in two years took place in October.

Employers typically bring in workers on a temporary basis before deciding to make more permanent hires. As such, he expects gains in payrolls by next spring.

"Despite the gloomy job picture, there are some encouraging signs," he said.

**bio-chem** · 11-06-2009, 09:23 AM

obama 2012

**mcguin** · 11-06-2009, 09:24 AM

number of layoffs are droppings is because there aren't too many employees anymore to actually layoff! Oh but according to the white house, we're doing much better! Bunch of BS, can anyone say Carter years?!

**Prince** · 11-06-2009, 10:18 AM

Originally Posted by bio-chem

obama 2012

yeah, the current mess we're in is Obama's fault.

**bio-chem** · 11-06-2009, 12:35 PM

Originally Posted by Prince

yeah, the current mess we're in is Obama's fault.

obama or congress. take your pick.

**busyLivin** · 11-06-2009, 01:43 PM

Originally Posted by Prince

yeah, the current mess we're in is Obama's fault.

do you place any of the blame at his feet?

**Prince** · 11-06-2009, 03:47 PM

Originally Posted by busyLivin

do you place any of the blame at his feet?

I don't like how he is continuing the bail-outs and stimulus monies, he is just racking up more debt and all of that is just making things worse.

We need to stop spending, start saving, stop outsourcing jobs to places like India, and start manufacturing some stuff here in the USA again.

**busyLivin** · 11-06-2009, 03:51 PM

Originally Posted by Prince

I don't like how he is continuing the bail-outs and stimulus monies, he is just racking up more debt and all of that is just making things worse.

We need to stop spending, start saving, stop outsourcing jobs to places like India, and start manufacturing some stuff here in the USA again.

Agreed.

**danzik17** · 11-06-2009, 05:36 PM

I don't get the finger pointing at Obama. He inherited the problem, although I don't think he's fixing it the right way.

I also don't think that Bush caused the problem, but I do think that he exacerbated it.

This particular problem started in the year 2000 with that recession and the loads of free money that started the mortgage bubble. It was also disguised because GDP remained high via consumerism fueled by debt, not savings.

I point my finger squarely at monetary policy. The fed deserves a lot of this blame for their terrible policies, but congress and all presidents over the last 1-2 decades deserve blame for not stopping this. They essentially sold our futures by racking up absurd amounts of debt and screwing over the American worker with free trade agreements that makes it easy to oursource work to countries with legalized slavery (chinese sweatshop anyone?)

**lnvanry** · 11-06-2009, 05:47 PM

Originally Posted by danzik17

I don't get the finger pointing at Obama. He inherited the problem, although I don't think he's fixing it the right way.

I also don't think that Bush caused the problem, but I do think that he exacerbated it.

This particular problem started in the year 2000 with that recession and the loads of free money that started the mortgage bubble. It was also disguised because GDP remained high via consumerism fueled by debt, not savings.

I point my finger squarely at monetary policy. The fed deserves a lot of this blame for their terrible policies, but congress and all presidents over the last 1-2 decades deserve blame for not stopping this. They essentially sold our futures by racking up absurd amounts of debt and screwing over the American worker with free trade agreements that makes it easy to oursource work to countries with legalized slavery (chinese sweatshop anyone?)

and the white house doesn't control monetary policy...unless a president with balls decides to act on Exec Order 11110.

We are going to get US manufacturing jobs back to past levels until unions are marginalized...they cost way too much. This is why the South is the new proud recipient of new facilities from Toyota, Caterpillar, Ford, and Boeing...right to work states down there.

**jmorrison** · 11-06-2009, 06:20 PM

One word is ruining this country, and it isn't Bush or Obamas fault:

NAFTA

**danzik17** · 11-06-2009, 07:51 PM

Originally Posted by lnvanry

and the white house doesn't control monetary policy...unless a president with balls decides to act on Exec Order 11110.

We are going to get US manufacturing jobs back to past levels until unions are marginalized...they cost way too much. This is why the South is the new proud recipient of new facilities from Toyota, Caterpillar, Ford, and Boeing...right to work states down there.

Sure they do. Maybe not directly, but they control it via the virtue of veto power. The president could have also chosen a Fed chairman that's less of an interventionist. The secretary of the Treasury could have recommended a different path instead of trillions of dollars of inflated bailouts.

**Big Smoothy** · 11-06-2009, 10:15 PM

Originally Posted by bio-chem

obama 2012

The unemployment rate has nothing to do with Obama, IMO.

And it has/had nothing to do with GWB.

One of the biggest myths about the US Presidency is the false perception by many in the public that the President (and his administraion) can reduce unemployment.

Another false belief is that the President can "create" jobs.

I believe the reason for this myth is because of Presidential elections:

Candidates for Presidency (Incumbents) take credit for a good economy and it helps them.

Candidates running for office use the bad economy (and their cures) to get votes from a public that does indeed, vote with their pocket books.

"It's the economy, stupid," was Bill Clinton's slogan. It was perfectly timed, and the economic problems were occurring during this time.

No President, no administration, no new government can change the structural deficiencies in the US economy.

The plan and strategy for the current economic paradigm began decades and decades ago.

Now, we are living with the consequences.

The President cannot. No President can.

Yes, people vote with their pocket books, of course.

**lnvanry** · 11-06-2009, 10:20 PM

Originally Posted by danzik17

Sure they do. Maybe not directly, but they control it via the virtue of veto power. The president could have also chosen a Fed chairman that's less of an interventionist. The secretary of the Treasury could have recommended a different path instead of trillions of dollars of inflated bailouts.

Realistically, how frequently if ever has the white house vetoed the FED's actions?

**Big Smoothy** · 11-06-2009, 10:23 PM

Originally Posted by lnvanry

We are going to get US manufacturing jobs back to past levels until unions are marginalized...they cost way too much. This is why the South is the new proud recipient of new facilities from Toyota, Caterpillar, Ford, and Boeing...right to work states down there.

Yes, the South get these manufacturing jobs, because the wages are lower and there are less benefits in the South.

But manufacturing will never return to America.

Even an American non-union worker, cannot compete against a Chinese or bangladeshi factory worker who'll work for $2 per day.

The manufacturing is gone - and gone for good.

This has been the plan since 1946 - right after WWII ended. US manufacturers first went to Africa to investigate and explore. Later it Taiwan, Japan, Korea, and then the Maquiladoras in Mexico, then China and India.

**jmorrison** · 11-06-2009, 10:33 PM

Originally Posted by Big Smoothy

Yes, the South get these manufacturing jobs, because the wages are lower and there are less benefits in the South.

But manufacturing will never return to America.

Even an American non-union worker, cannot compete against a Chinese or bangladeshi factory worker who'll work for $2 per day.

The manufacturing is gone - and gone for good.

This has been the plan since 1946 - right after WWII ended. US manufacturers first went to Africa to investigate and explore. Later it Taiwan, Japan, Korea, and then the Maquiladoras in Mexico, then China and India.

This.

I should have been specific in my earlier post that NAFTA is killing our country and instead said "NAFTA is putting the nails in the coffin".

**danzik17** · 11-06-2009, 10:57 PM

Originally Posted by lnvanry

Realistically, how frequently if ever has the white house vetoed the FED's actions?

Well they can't veto the fed actions - the fed is independent of politics in that fashion. That's one of the things that makes it so dangerous; they aren't accountable or transparent to the general public.

You are correct that the Administration doesn't frequently come out in direct opposition of the Fed, I'm just saying that they don't deserve a free pass.

**Big Smoothy** · 11-07-2009, 08:12 AM

Originally Posted by jmorrison

This.

I should have been specific in my earlier post that NAFTA is killing our country and instead said "NAFTA is putting the nails in the coffin".

Yes, NAFTA was another nail.

Ross Perot, as eccentric as he was/is, got NAFTA right, IMO.

On the outsourcing of jobs front, it's not just manufacturing, either.

I live in Vietnam and I worked at an American company based in Atlanta that used to hire computer programmers in the US.

Now, they hire the top Vietnamese programmers they can find in Vietnam. ALL of the clients are American. It is hard to get a job at this company because of the competition, by the Vietnamese who want to work at this American company.

The pay: $300 USD per month, no benefits, whatsoever.

How much would a computer programmer in Atlanta, Georgia cost with

Medical plan employer-employee
Social Security tax, 6.5% employer
taxes
wages.

We cannot compete.

I don't thinks it's right, nor I don't think it's good.

But it's happening.

This American company also has an office in Bangalore, India.

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