Unemployment Still 5.7% but Jobs Vanishing

America’s unemployment rate held at 5.7% in October after rising for three straight months, but big new job losses still cut across the U.S. economy, the government said today.

For the third month in a row, more industries lost jobs than gained them, the Labor Department said in a report analysts took as new evidence a recession is taking hold. Dramatic falloffs in construction and manufacturing jobs pushed non-farm payrolls down by 70,000, the agency said.

(In California, the unemployment rate rose by 1/10th of a percentage point to 6%.)

The nationwide jobless rate held steady rather than rising again only because the labor force, which had been growing slowly, shrank by 183,000 workers in October. Students’ return to school probably explained much of that drop, economists said.

“This is strong evidence that the economy really has lost its footing now and slipped into recession,” said Robert Dederick, chief economist at the Northern Trust Co. of Chicago.

Before October, the nation’s unemployment rate had risen three months in a row, increasing half a percentage point from June’s 5.2% rate.

Analysts have expected the nation’s jobs outlook to continue to darken, partly because of the turmoil in the Persian Gulf. The oil price shock and the threat of war have left American businessmen skittish about adding employees, analysts said.

Many expect the jobless rate to continue climbing in coming months, possibly up to as much as 6.5% by next summer. Just in the last week, several major corporations have announced large-scale job layoffs.