Just when it was beginning to look a little better, the economic news relapsed Friday with a return to double- digit unemployment for only the second time since World War II and warnings that next year will be even worse. The jobless rate rocketed to 10.2 percent in October, the highest since early 1983, dealing a psycho- logical blow as Americans prepare holiday shopping lists.
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 extended a tax credit for first-time 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 , 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.”
In Colorado, the unemployment rate for September was 7 percent, the most recent data available.
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. About 15.7 million Americans are out of work.
The survey of companies doesn’t count the self-employed and undercounts employees of small businesses. So the economic picture could be even more dire.
And the unemployment rate doesn’t include people without jobs who have stopped looking, or those who have settled for part-time jobs. Counting those people, the unemployment rate would be 17.5 percent, the highest since at least 1994.
Economists had expected unemployment to rise to no more than 9.9 percent, up just a tick from September’s 9.8 percent, and the surprising jump added to fears that the recovery could fizzle if Americans don’t spend.
For months, Obama had warned it was coming.
“I won’t let up until the Americans who want to find work can find work, and until all Americans can earn enough to raise their families and keep their businesses open,” the president said Friday.
