NOVEMBER 8, 2008
Labor Data Show Pain Across Economy
By Sudeep Reddy, Kris Maher and Ilan Brat
President-elect Barack Obama, in his first major remarks since Election Day, called Friday for extended unemployment benefits and a “rescue plan for the middle class” as new employment figures signaled that the economic crunch is worsening.
Mr. Obama spoke hours after the Labor Department reported that the U.S. unemployment rate soared to a 14-year high in October, buttressing economists’ warnings that the current downturn will rival the worst recessions since the end of World War II.
Mr. Obama said a fiscal-stimulus plan to support the economy was “long overdue” and said he wants a package “sooner rather than later.” Lawmakers are considering a package of measures worth as much as $100 billion when Congress reconvenes later this month. “If it does not get done in the lame-duck session, it will be the first thing I get done as president of the United States,” he said.
The unemployment rate spiked to 6.5% in October from 6.1%, the Labor Department said. Many forecasters expect joblessness to top 8% by the end of 2009. In a separate survey, nonfarm payrolls declined 240,000 in October. The earlier two months were revised down significantly, indicating the economy was well in decline before the credit crisis hit its worst point in September and October. The country has lost about 1.2 million jobs so far this year, notching more than half those losses in the past three months.
The jobs report showed pervasive weakness in the economy, with few sectors spared layoffs. The construction and manufacturing industries, which were hit early on in the downturn, saw job losses increase in October, while the retail, hospitality and professional-services sectors all announced sharp job cuts. The grim jobs data were followed by reports of quarterly losses at Ford Motor Co. and General Motors Corp.
“Problems are now broad based,” Federal Reserve Bank of Atlanta President Dennis Lockhart said in a speech Friday. The U.S. economy “appeared to weaken dramatically” in September and October as “forces of contraction took hold in consumer spending, business investment, industrial production and foreign demand for U.S.-made goods.”
The Dow Jones Industrial Average rose 2.9% Friday as investors largely shrugged off the surge in the U.S. jobless rate, anticipation of which had helped spark the market’s 9.7% selloff on Wednesday and Thursday. That slide was essentially factored into the market when the unemployment figures were released.
Education, health services and energy-production-related mining were among the few major areas that added jobs. Government, traditionally a resilient sector, posted a job decline in the revised September figures and only modest growth in October. State and municipal governments are expected to cut more jobs in the coming year as tax revenue declines. . .