Reporting from Washington -
As the nation's unemployment rate surged to 10.2% in October, reaching double digits for the first time in 26 years, President Obama signed a measure today providing additional aid for the jobless as well as expanding and extending a home buyer tax credit to help spur economic growth.
"The need for such a measure was made clear by the jobs report we just received this morning," Obama said at the White House. He called the Labor Department figure released today "a sobering number that underscores the economic challenges that lie ahead."
The unexpectedly sharp increase in the unemployment rate, from 9.8% in September, came as employers dropped 190,000 workers from their payrolls last month. That was larger than the 175,000 job losses that most forecasters were expecting for the month, and it underscored just how dire the labor market remains despite the recent upturn in the nation's economic output.
The report did offer glimmers of hope. Government statisticians said job losses in September and August were a combined 91,000 fewer than previously estimated, and the latest month continued a trend of moderating job reductions since an average of nearly 700,000 positions were cut monthly in the first quarter. Moreover, employment in the temporary-help industry, which is considered a harbinger of broader hiring, has begun to grow again.
Still, all that was overshadowed by the big jump in the jobless rate, which professional forecasters thought would inch up to 9.9% in October. Unemployment had been steadily rising in recent months, but the double-digit figure is likely to have a major psychological effect as well as potentially significant consequences in Washington.
"It's an important political threshold," said Robert Reich, the former Labor secretary in the Clinton administration who now teaches at the UC Berkeley. With the midterm elections looming next year, he said, "the 10% is going to give Republicans more ammunition to criticize the [Obama] administration and force the hand of the administration to at least appear to be taking additional steps to remedy the situation."
House Minority Leader John Boehner (R-Ohio) said people are wondering where the jobs are that were promised by the $787-billion economic stimulus.
"The president himself has said that job creation is the ultimate measure of economic performance," Boehner said. "Today's report is just another reminder that American families and small businesses are still struggling as the White House response continues to fall short."
The White House said last week that the stimulus had created or saved 1 million jobs, but many economists have questioned the figure because of the difficulty of determining whether a job would have been lost without the money. Regardless, the Obama administration said in January that unemployment would not top 8% this year if the stimulus was approved.
In apparent anticipation of today's bad statistical news, the White House scheduled Obama to sign new legislation that extends jobless benefits for 14 weeks in all states and 20 weeks in hard-hit states, such as California.
The legislation also extends until April 30 the popular tax credit of up to $8,000 for first-time home buyers, as well as creates a credit of up to $6,500 for existing homeowners who want to move up to a new house. The income requirements for the credit also were expanded.
Obama said his administration had succeeded in stopping "the free fall of the economy," noting that overall job losses continued to lessen in October.
"History tells us that job growth always lags behind economic growth," Obama said. "I can promise you I won't let up until the Americans who want to find work can find work."
Christina Romer, head of the president's Council of Economic Advisors, said the jobless report showed signs of hope and evidence of continued weakness in the labor market. She noted the gains at temporary-staffing firms as well as the car industry, which has been boosted by the "cash for clunkers" auto rebate program. Nonetheless, Romer acknowledged the seriousness of the double-digit jobless figure, saying it was "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."
The last time the jobless rate crossed double digits was during the recession and initial recovery period of the early 1980s. Then, unemployment hit 10.1% in September 1982 and stayed at or above that level, rising to a high of 10.8%, until June the following year. This time around, unemployment has risen even faster and, by some analysts' reckoning, could hover around 10% for much longer. The jobless rate at the start of this year was 7.6% and it was a mere 4.9% in late 2007, when the latest recession officially began. Since then, the number of unemployed workers has increased by 8.2 million to 15.7 million as of October, according to figures compiled by the Bureau of Labor Statistics.
The labor situation is actually worse than what these figures and the 10.2% rate show. The government doesn't count as officially unemployed the so-called discouraged workers who have given up looking for jobs -- which in October numbered 808,000, up from 484,000 a year earlier.
There also were 9.3 million people who reported they had little choice but to work part time because their hours had been cut or they could not find full-time jobs. If this group and discouraged workers are included, along with others on the fringe of the labor market, the nation's unemployment and underemployment rate in October was 17.5%.
The unemployment rate is estimated based on the government's monthly survey of about 60,000 households. A separate survey of about 160,000 private and public employers -- which many analysts consider more revealing of the job market trends -- showed a net loss of 190,000 jobs in October, down from a drop of 219,000 payrolls in September.
Since late 2007, payroll employment has fallen by about 7.3 million. Manufacturing and construction have taken the biggest hits, and those industries continued to shed jobs in October. Factory payrolls fell 61,000 over the month, and construction lost 62,000 jobs.
The retail sector, heading into the holiday season, trimmed 40,000 positions last month. And the leisure and hospitality industry, which includes hotels, shed 37,000 jobs.
"The need for such a measure was made clear by the jobs report we just received this morning," Obama said at the White House. He called the Labor Department figure released today "a sobering number that underscores the economic challenges that lie ahead."
The unexpectedly sharp increase in the unemployment rate, from 9.8% in September, came as employers dropped 190,000 workers from their payrolls last month. That was larger than the 175,000 job losses that most forecasters were expecting for the month, and it underscored just how dire the labor market remains despite the recent upturn in the nation's economic output.
The report did offer glimmers of hope. Government statisticians said job losses in September and August were a combined 91,000 fewer than previously estimated, and the latest month continued a trend of moderating job reductions since an average of nearly 700,000 positions were cut monthly in the first quarter. Moreover, employment in the temporary-help industry, which is considered a harbinger of broader hiring, has begun to grow again.
Still, all that was overshadowed by the big jump in the jobless rate, which professional forecasters thought would inch up to 9.9% in October. Unemployment had been steadily rising in recent months, but the double-digit figure is likely to have a major psychological effect as well as potentially significant consequences in Washington.
"It's an important political threshold," said Robert Reich, the former Labor secretary in the Clinton administration who now teaches at the UC Berkeley. With the midterm elections looming next year, he said, "the 10% is going to give Republicans more ammunition to criticize the [Obama] administration and force the hand of the administration to at least appear to be taking additional steps to remedy the situation."
House Minority Leader John Boehner (R-Ohio) said people are wondering where the jobs are that were promised by the $787-billion economic stimulus.
"The president himself has said that job creation is the ultimate measure of economic performance," Boehner said. "Today's report is just another reminder that American families and small businesses are still struggling as the White House response continues to fall short."
The White House said last week that the stimulus had created or saved 1 million jobs, but many economists have questioned the figure because of the difficulty of determining whether a job would have been lost without the money. Regardless, the Obama administration said in January that unemployment would not top 8% this year if the stimulus was approved.
In apparent anticipation of today's bad statistical news, the White House scheduled Obama to sign new legislation that extends jobless benefits for 14 weeks in all states and 20 weeks in hard-hit states, such as California.
The legislation also extends until April 30 the popular tax credit of up to $8,000 for first-time home buyers, as well as creates a credit of up to $6,500 for existing homeowners who want to move up to a new house. The income requirements for the credit also were expanded.
Obama said his administration had succeeded in stopping "the free fall of the economy," noting that overall job losses continued to lessen in October.
"History tells us that job growth always lags behind economic growth," Obama said. "I can promise you I won't let up until the Americans who want to find work can find work."
Christina Romer, head of the president's Council of Economic Advisors, said the jobless report showed signs of hope and evidence of continued weakness in the labor market. She noted the gains at temporary-staffing firms as well as the car industry, which has been boosted by the "cash for clunkers" auto rebate program. Nonetheless, Romer acknowledged the seriousness of the double-digit jobless figure, saying it was "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."
The last time the jobless rate crossed double digits was during the recession and initial recovery period of the early 1980s. Then, unemployment hit 10.1% in September 1982 and stayed at or above that level, rising to a high of 10.8%, until June the following year. This time around, unemployment has risen even faster and, by some analysts' reckoning, could hover around 10% for much longer. The jobless rate at the start of this year was 7.6% and it was a mere 4.9% in late 2007, when the latest recession officially began. Since then, the number of unemployed workers has increased by 8.2 million to 15.7 million as of October, according to figures compiled by the Bureau of Labor Statistics.
The labor situation is actually worse than what these figures and the 10.2% rate show. The government doesn't count as officially unemployed the so-called discouraged workers who have given up looking for jobs -- which in October numbered 808,000, up from 484,000 a year earlier.
There also were 9.3 million people who reported they had little choice but to work part time because their hours had been cut or they could not find full-time jobs. If this group and discouraged workers are included, along with others on the fringe of the labor market, the nation's unemployment and underemployment rate in October was 17.5%.
The unemployment rate is estimated based on the government's monthly survey of about 60,000 households. A separate survey of about 160,000 private and public employers -- which many analysts consider more revealing of the job market trends -- showed a net loss of 190,000 jobs in October, down from a drop of 219,000 payrolls in September.
Since late 2007, payroll employment has fallen by about 7.3 million. Manufacturing and construction have taken the biggest hits, and those industries continued to shed jobs in October. Factory payrolls fell 61,000 over the month, and construction lost 62,000 jobs.
The retail sector, heading into the holiday season, trimmed 40,000 positions last month. And the leisure and hospitality industry, which includes hotels, shed 37,000 jobs.
