The jobless rate rocketed to 10.2 percent in October, the highest since early 1983, dealing a psychological blow to Americans as they prepare holiday shopping lists. It was another worse-than-expected report casting a shadow over the struggling recovery.
President Barack Obama called it "a sobering number that underscores the economic challenges that lie ahead." He signed a measure to extend unemployment benefits and to expand a tax credit for homebuyers.
Economists had not expected the 10 percent mark to come so quickly and immediately darkened their forecasts. Mark Zandi, chief economist at Moody's Economy.com, and Joshua Shapiro, chief U.S. economist at MFR Inc., predicted the rate will peak at 11 percent by mid-2010. They earlier had projected 10.5 percent.
Unemployment at 11 percent would be a post-World War II record. Only once since then has joblessness hit double digits in the United States, from September 1982 to July 1983, topping out at 10.8 percent.
"It's not a good report," said Dan Greenhaus, chief economic strategist for New York-based investment firm Miller Tabak & Co. "What we're seeing is a validation of the idea that a jobless recovery is perfectly on track."
The Labor Department, using a survey of company payrolls, said the economy shed 190,000 jobs in October. A separate survey of households found 558,000 more people were unemployed last month than in September. Some 15.7 million Americans are out of work.
The survey of companies doesn't count the self-employed and undercounts employees of small businesses.
One struggling small business, homebuilder Miller and Smith Inc. of McLean, Va., has cut its work force to about 100 from 350 at the height of the housing market in 2005. The company has been hurt by a slowdown in building and surging health-care costs.
(2 of 3)Economists say U.S. on path to recoveryReal Estate Outlook: Mixed Signals
