Jobless rate at 10.2 percent, and it's likely to stay high for months to come
Filed under: Company News, Economy, People
It finally happened. After months of anticipation and trepidation, the nation's unemployment rate inched into double digits, reaching 10.2 percent in October, after employers cut 190,000 jobs last month, the Labor Department reported Friday. The increase topped analyst expectations of 175,000 lost positions and a rise in the jobless rate to 9.9 percent. But now that the 10-percent mark has been breached, what does it mean for investors, and more important, those looking for work?
Let's begin with Wall Street. Recent economic releases have resulted in volatile swings on the Big Board. Good news, such as a batch of positive economic data on Thursday, has brought rallies, and bad news has sent shareholders into a selling frenzy. But those sudden gains and falls largely happened on unexpected news. Friday's jump in unemployment was higher than expected, and positive stock futures quickly beat a retreat this morning, moving lower at about 8:45 a.m. Eastern Time.
For people looking for work, the October data simply reaffirm what they already knew: Lots of people are out of work, and more have joined the jobless rolls.
"We know unemployment is high, and it's not likely to go down anytime soon," says John Challenger, chairman and chief executive at Challenger, Gray & Christmas, an employment-services firm. If there's one bright spot, it's that the rate isn't likely to rise much higher, hovering around 9 to 10 percent for some time.
A Long Lag Time
There's precedent for unemployment rates staying stubbornly high even after economic recovery begins. Economists largely believe the economy began growing sometime during the third quarter after some 19 months of contraction. Following recessions in the early 1990s and 2001, job creation lagged economic turnaround by 15 to 19 months, Challenger says. Given the depth of the recent recession, it's likely to take at least as long -- if not longer -- for job growth to return.
The high probability of sustained high unemployment rates was one impetus behind passage of a bill this week in Congress that extends jobless benefits by up to 20 weeks in hard-hit states. President Obama is due to sign the legislation Friday morning.
That legislation appears more important now than yesterday, given how wide-ranging the job losses were. In October, services and manufacturing both cut 61,000 jobs, construction employment fell by 62,000, and retail shed 40,000 jobs. Health care and education, which has been a solid job growth area over the past year, added 45,000 jobs. Professional services increased by 18,000 positions.
Also, a separate unemployment gauge, which includes workers who can find only part-time work and "discouraged workers," rose to a record 17.5 percent in October from 17.0 percent in September and 16.8 percent in August. In addition, total hours worked declined 0.2 percent, and the average workweek was essentially unchanged at 33.0 hours. Average hourly earnings rose 5 cents to $18.72.
Cheaper to Hire, Easier to Cut
Though many people pay keen attention to the overall unemployment rate, Friday's jobs report contains other data that provide better insight into where the economy is likely headed. One of those is the number of temporary workers employers are hiring to keep up with increased demand for their products or services, says Christy Caridi, director of the Bureau of Economic Research at Marist College in Poughkeepsie, N.Y.
Such workers aren't given benefits and thus are cheaper to employ. They can also be easily cut. "Increases in temporary hires is usually the beginning of the correction in the labor market," Caridi notes. Friday's report showed an increase of 34,000 in the number of temporary workers hired in October.
As important is the percentage of people who have taken part-time work, in lieu of full-time employment, she says. "You have a lot of people who have taken part-time employment, who are considered employed now," Caridi points out, but haven't yet found jobs that can pay them a livable wage.
The Labor Department report showed the number of people working part-time for economic reasons, sometimes referred to as involuntary part-time workers, was little changed in October at 9.3 million. All told, the worse-than-expected unemployment news drives home the fact that even if the recession is officially over, for millions of Americans that day is still a long way off.
With additional reporting by Joe Lazarro
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Reader Comments (Page 1 of 18)
11-06-2009 @ 9:27AM
Ken Siemers Sr. said...
I wonder how long Obama thinks he can fool the American public by blaming the Bush Administration. The fact is, most of us long for the good old days of the Bush administration. The Democrats just don't get it. They're so wrapped up in Obama's BS, they can't see the reality.
Reply
11-06-2009 @ 9:37AM
Richard said...
Ken, the problem is that some are so "entranced" with BO that they will not see until they get the pink slip.
11-06-2009 @ 9:45AM
THogue7464 said...
At 10.2 thats almost as high as Regans first term when it was at 10.5 at one time.
11-06-2009 @ 9:50AM
turner5ofvinla said...
The Liberals are blinder than bats, at least bats have sonar to guide them. Bush is long gone and it is time for those who voter for change to wake up and see that their messiah is only digging a bigger hole to bury us in I would gladly trade the Obama deficit for a Bush deficit. Until we clean out Washington of this tax and spend bunch of liberals we are DOOMED.
11-06-2009 @ 10:26AM
dougsholme said...
Well, all the Chicken Littles are out in force today, screaming "The sky is falling!" Oh, and It's all President Obama's fault, because this recession began on Jan 21 this year. These doom and gloom, self-styled experts on the economy don't understand anything, much less business cycles. The pessimists squawk while the other 80% of Americans are busy working and planning for our future.
11-06-2009 @ 12:36PM
SICK OF REBS!!!!!!!! said...
BUSH JR,DIDNT DO ONE GOOD THING EXPECT KEEP THE 2ND AMENDMENT ALIVE! BOTH PARTYS FAILED AND THERE NEVER HAS BEEN A GOOD TIME HAS THERE WAS WHEN CLINTON WAS PRES! AT LEAST THEN THERE WAS JOBS! AND WAGES WERE GOING UP,WITH BUSH THEY DESTROYED WHAT WAS LEFT OF UNION JOBS-DROPPED WAGES,AND MADE HIS OIL BARON BUDDYS RICH,SO IF WANT A REB IN OFFICE AND CAN AFFORD IT! THEN U FILL MY TANK AND PAY MY HEALTH INSURANCE------ONLY THE US TOP TEN PERCENT (WEALTHY) CAN AFFORD TO BE REB,SO GET YOUR HAMMER AND SICKLE FLAG OUT,CAUSE IT IS ALIVE IN THE USA TODAY!!!!!!
11-06-2009 @ 12:52PM
Paul Del said...
Reality is the Bush Mess, what do you think, it could be cured in a few months, lol, Bush and Cheney have no legacy, 8 years of them two birds was way to much, Obama will be a great president in a couple of years, Go away! Dick Cheney, Bush just keeps quiet, now that is the best thing he has accomplished
11-06-2009 @ 1:13PM
Paul Del said...
The truth is hard to swallow!, you have people like Dick Cheney and a few other wackcos hoping President Obama fails, that is un-American, just think if the President did nothing went he came into office?, what do you think would happen?, I hate the thought, Dick Cheney said, Quote! "Government means nothing!", his friends had contracts for the troops fighting these wars, Cheney was collecting $7,000.00 a month from Halliburton when he was also VP, the old saying! When you fall down you get up, or just lay there doing nothing, that is weakness................
11-06-2009 @ 1:14PM
song17dog said...
I AM SORRY TO SAY YOU ARE ONE OF THE FANATIC REPUBLICANS THAT I HAVE TO APPOLIGIZE FOR. I KNOW AS A REP. I SHOULD BLAME OBAMA. BUT UNFORTUNATELY I CAN SEE AND REMEMBER WHEN THE CRASH STARTED. THE FIRST BAILOUT OCCURED BACK IN AUG 08 MONTHS BEFORE OBAMA TOOK OFFICE. HOW WAS HE AT FAULT FOR THAT AND THE ECONOMY WAS SHOWING PROBLEMS EVEN BEFORE THAT. BUT KEEP YOUR DELUSION AND BLAME OBAMA. BY ALL MEANS
11-06-2009 @ 2:02PM
Sold out said...
Bush, "good ole days"? Please! I recall Bush wanting to put all social security in the stock market! Not to mention the republican deregulation of everything!
Get real and recognize that, while the stocks crashed on Bush's watch a Democratic Congress voted in the first "no-strings-attached" TARP.
There is little difference in policy no matter which side of the aisle you want to sit on. Politicians do not get elected without owing to special interest campaign finance and, both parties have sold out the American people.
11-06-2009 @ 3:09PM
dan said...
Even in the 29 depression productivity increased due to layoffs...We are headed for a jobless recovery because of transnational corporations rule your government, you know, the government who is elected to represent you. Outsourcing started with Jack Welch and every Republican has supported it along with the corporate Democrats, as Bill Clinton did.
In 1973 was when exports started to decrease and imports began to infiltrate our shores, and it has been out of balance since then. Why? In 1948 GATT was passed which reduced America's tariffs from 29% to 15% and things got moving toward globalism and the export of jobs from this country. Since then tariffs have been reduced to around 5%.
However, we could have been in a better position if we had an economy more closely to that of Germany's pre 1990. Corporations are made by the government to be productive and competitive, by not allowing them to become monopolies, and therein lies the difference.
You see, if the neocon Republicans and the corporate Democrats were for free enterprise they would break up the monopolies in health insurance, gas and oil, auto industry, etc. and allow small companies to grow and prosper without being bought and sold with debt by their competitors. But they're not.
They are being bought by the corporatists pimps to say big government and taxes are the problem to growth. It's mainly the libertarians of the Ayn Rand ilk that believe that no regulation and big government is the problem. If that were true, why do we have a banking failure and no competition in health insurance, gas prices, pharmaceuticals, after years of tax breaks and deregulation and on and on.
Because they get their campaign contributions from them to keep things the way they are. It's time to change our elections to public funded elections and make it illegal to take any money from anyone..............
11-06-2009 @ 4:06PM
John said...
You must be kidding, if you long for the Bush administration policies you are living the results. All Neocon's need to get a life.
11-06-2009 @ 4:44PM
maximum joe said...
Libtards make me laugh. It's all Bush, huh? If your calendar is correct, you will see that big numbers for job loss started at the exact same time the Dems took the majority.. But that is a fact that can be proven so libs won't want to here about it.
11-06-2009 @ 5:24PM
Tony said...
You are a moron. Everytime there is a Bush in officeI've lost my job and been unemployed for over a year. I have a college degree in accounting, but it doesn't seem to matter. I'm not saying Obama will be any better, but I don't long for the "good old days" under Bush.
11-06-2009 @ 5:36PM
Glenn said...
Tony: If you lose your accounting job and can't find another for over a year every time a republican is in office, I'd say that reflects more on you being a poor employee than anything else. If you made yourself invaluable to your employer, you'd NEVER be cut. Couldn't you try harder? Couldn't your work be done better, more efficiently, more timely? Throughout the recession, accounting and healthcare are 2 of the "safest" industries to be in as jobs were plenty. The fact that you couldn't find a job for one year reflects poorly on you, not on the presidential administration in charge. Whose at fault for your unemployment? Look in the mirror. Typical liberal.....blame everything on someone else....never take personal responsibility for their lives.
11-07-2009 @ 1:30PM
ANNE said...
This Obama guy would not know the truth if it hit him in the face. He is in such denial. Everyone needs to vote him out of office, or better yet impeach him, and his liberal congress with him. I am not going to vote for any incumbents
11-06-2009 @ 6:19PM
Dave said...
You can blame Reaganomics trickle down for this mess, it didn't work. Google wages and ceo pay over the last 25 years. My Dad worked in a facory; bought a home,2 cars in the garage, raised 3 boys, took vacations. All on ONE PAYCHECK. Then Reagan. Now it takes two. Explain why please.
11-06-2009 @ 9:47PM
jackisbackprt4 said...
Ken Siemers Sr. said...I wonder how long Obama thinks he can fool the American public by blaming the Bush Administration. The fact is, most of us long for the good old days of the Bush administration. The Democrats just don't get it. They're so wrapped up in Obama's BS, they can't see the reality.
"====The question should be, I wonder how long will you Obama hating fanatics think you can fool the American public into believing your anti Obama hype, especially with the assinine notion that you fanatics think you can blame him for failures of the last 8 years. Talking about BS and the amount of BS you fanatics have wrapped yourselves up in. I believe any intelligent and rational society would realize how this country has arrived at its current challenge and that it took longer than 10 months to get to this point. I also believe a rational and intelligent society would work with its leadership, patiently even if they are suffering to improve the environment. Afterall, you idiots are making it harder for yourselves when you attempt to obstruct and interfere with progressive work that is being done on your behalf. I also shudder to think how things would be if McCain and Palin were elected. I imagine you fanatics would really have something to freaken squeel about.
11-06-2009 @ 9:53PM
sfkendoll said...
No, ,most of us do not want to go back to the nightmare that was Bush/Cheney.
11-06-2009 @ 10:23PM
arthur bailey said...
AMEN BROTHER YOU ARE ON IT!!!!!!!!!!!!!!!!!!!!