Unemployment Rate Rises to 5.7% in October
The nation’s unemployment rate edged up to 5.7% in October and employers shaved payrolls by 5,000, suggesting an economy that still is struggling more than a year after it began growing again.
The payroll decline was the second in two months, the Labor Department said Friday. Employers cut 13,000 jobs in September. The new numbers suggest that Americans are in for another painfully slow and uneven comeback like that of the “jobless recovery” of the early 1990s.
Separately, the government said Friday that consumers cut back on their spending by 0.4% in September, the largest decline in 10 months and one largely traceable to a sharp drop in sales of new autos. In addition, American manufacturing activity contracted for a second month in a row.
“The recession is over, but this recovery is punk,” said Robert J. Barbera, chief economist with ITG/Hoenig, a Rye, N.Y., brokerage firm. “The best thing for people to do is to forget about the late-’90s boom. There is no hope of getting back to that kind for a long time to come.”
If there was any good news to be extracted from the latest figures, it was that the 0.1-point rise in the jobless rate was less than the 0.2-point jump that most forecasters had predicted.
Analysts said the latest signs of economic weakness made it increasingly likely that the Federal Reserve would cut interest rates still lower when its policymaking body meets Wednesday, a day after the midterm congressional elections.
Although Labor Department officials described the latest job figures as “about unchanged,” details of the department’s October report paint a troubling picture for unemployed workers.
The full dimensions of the job market weakness have been partially obscured by moderate but transitory government hiring, mostly of airport security guards. Private-sector jobs fell by 29,000 last month and by 190,000 since the beginning of the year, according to department figures.
The fraction of the unemployed who are considered long-term and have been out of work for six months or more rose to an eight-year high of 20.3%. About 1.66 million people fell into that category in October, up 71,000 from September.
The number of unemployed workers the department considers to have permanently lost their jobs -- as opposed to being temporarily laid off -- jumped by 146,000 to 3.68 million. More than 1 in 2 unemployed Americans now is counted as a permanent job loser.
Even for people who were still working last month, the news was not particularly encouraging. Average hourly wages, which had continued to rise through last year’s recession, increased only 3 cents, about a 3% annual rate, their slowest pace since 1995. The average workweek and weekly wages both declined.
Among the few industries to add workers were legal services (7,000), health care (20,000) and the finance, insurance and real estate sector (70,000), largely to cope with the boom in mortgage refinancings.
The unemployment rate among adult women unexpectedly rose from 4.9% in September to 5.2%. The rate among blacks edged up from 9.6% to 9.8%. The rate among Latinos climbed from 7.4% to 7.8%.
Analysts said the latest employment report and the other statistics released Friday showed an economy that is stuck in the mud -- not sinking but unable to move forward despite continued buying by consumers.
Sharply reduced demand for big-ticket items such as new cars and trucks was largely responsible for September’s 0.4% drop in consumption. The decline offset August’s similar-sized increase and occurred despite a 0.4% increase in Americans’ income and automakers’ offers of low-interest financing.
October new-vehicle sales fell to an annualized pace of 15.4 million units, from 16.3 million in September and 18.7 million in August. Analysts said October sales were the slowest since April 1998.
