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Recovery fails to generate jobs as unemployment rate rises above 10%
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The phrase "jobless recovery" may become a favored term for most analysts after the unemployment rate jumped above 10% for the first time in 26 years, and nonfarm payrolls continued to shrink at a rapid pace.
The Bureau of Labor Statistics reported that the unemployment rate increased 0.4 percentage points to 10.2% in October, well above the Bloomberg forecast of 9.9%, while nonfarm payrolls declined by 190,000.
Nonfarm payrolls have declined by more than 100,000 for 21 consecutive months, bringing the total number of jobs lost since the recession began to 7.3 million, according to the BLS.
Weakness was concentrated in manufacturing and services, which both lost 61,000 positions, and despite recent gains in housing, 62,000 jobs disappeared in construction. Health services and education, however, continued to rack up gains, adding 45,000 positions.
About the only piece of relatively positive news came from revisions released by the BLS, as job losses from August and September were revised downward by over 90,000.
Despite recent gains in economic activity, weekly jobless claims remain intolerably high, and many companies remain tentative about the economic recovery and are not ready to beef up staff. Without a recovery in the job market, consumers are more likely to remain on the sidelines, restraining growth going forward.
Economy 101: What is the unemployment rate? and Economy 101: What are nonfarm payrolls? are also available.
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