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November 6th, 2009
02:12 PM ET

Financial Dispatch: Unemployment rate tops 10%

Andrew Torgan
CNN Financial News Producer

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/11/06/unemployment.rates.jpg]

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 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 Labor Dept. said this morning that unemployment rate spiked to 10.2% last month, up from 9.8% in September. That’s the highest rate since April 1983.

There was also a net loss of 190,000 jobs in October. And while that’s worse than what economists were expecting and is still a big number – it is an improvement from the 741,000 jobs we lost in January.

The largest losses last month were in the construction, manufacturing and retail sectors.

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.

It’s with that employment report as a backdrop that President Obama signed into law a bill to provide up to 20 additional weeks of jobless benefits to unemployed Americans, as well as extend the $8,000 tax credit for new homebuyers into the middle of next year.

After calling the jobless rate “sobering,” Obama said the bill he signed “will help grow our economy, help create and save jobs, and help provide necessary relief to small businesses,” in a statement following the signing.

The House approved the measures by a 403-12 vote Thursday afternoon, a day after the Senate passed the legislation.

The closely watched legislation will extend jobless benefits in all states by 14 weeks. Those that live in states with unemployment greater than 8.5% will receive an additional six weeks. The proposal will be funded by extending a longstanding federal unemployment tax on employers through June 30, 2011.

The Senate had been bickering over the details since September, and that cost more than 200,000 people their benefits. Some 7,000 unemployed Americans run out of benefits each day, according to the National Employment Law Project.

Commodities prices also reacted to the unexpected spike in the unemployment rate.

Crude oil prices dropped by more than $2 to around $77 per barrel. Oil prices have risen from a low of less than $33 a barrel last December to a high for this year of $82 in October.

And gold powered through the $1,100 an ounce barrier as nervous investors sought out the metal as a safe haven.

Gold prices have soared 5% this week amid speculation that overseas central banks may be moving toward buying more gold as they look for ways to reduce their exposure to the U.S. dollar - the traditional reserve currency of choice for many of those foreign central banks.
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Filed under: 360° Radar • Andrew Torgan • Finance • Unemployment
soundoff (4 Responses)
  1. Lisa in CA

    But the catch is that those of us who are/were self-employed are not eligible for unemployment benefits (at least not in CA). What is the total figure when added with the "under-employed"? At some point the WH has got to realize and understand that they have to get the money directly into the consumers' hands. We will then pay off our debt, get current in our mortgages thus giving banks money to loan and stimulating the economy. Top down doesn't work. I was truly hoping Obama's change would include a consideration of "bottom up".

    November 6, 2009 at 3:24 pm |
  2. earle,florida

    The unemployment numbers will not stop going up,period! Perhaps,...just perhaps,unfortunately, they'll reach 13%-15% before the gov't. has an epithany ,and realizes that as a service orientated workforce we have created over the last twenty-years,does't fill the void. We must immediately start implimenting a come-back,... proportionately creating a more viable manufacturing base. I believe that a proto-type public works program similar to the CC Camps of the FDR Presidentcy is/are realistic. You can teach a man to (creation of jobs to the infrastructure) fish,and feed his family for life,or give him a (a welfare check/unemployment check with no hope for the future) fish only feeding him for today(quoted parable). Where's the audacity of hope,...Mr President?

    November 6, 2009 at 3:10 pm |
  3. Tim Gibson

    We need to fasten our seat belts and brace for the crash.

    November 6, 2009 at 2:44 pm |
  4. alex lyrics

    the next round of stimulus moneys should go directly to the people.

    $150 million dollars could have given all 300 million in the us a half a million dollars.

    This would have saved a trillion dollars spent so far. The people would have purchased cars, homes, paid bills and done what most people do with money "SHOP" .

    This would have stimulated and circulated money to car dealers home sales, and every aspect creating jobs.

    OBAMA should try this next time, give every citizen money. It owuld have saved alot of heart ache.

    November 6, 2009 at 2:44 pm |