Unemployment Rate Tops 10%, Are We Peaking Yet?
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The unemployment rate jumped above 10 percent for the first time since 1983 in October according to the Labor Department.
Employers cut another 190,000 jobs in the last month pushing the unemployment rate to 10.2 percent, from the 9.8 percent rate in September. The job losses in October saw an improvement over the 219,000 reported in September, however higher than the economist's estimate of 175,000.
Economists had been expecting the unemployment rate to reach above the 10 percent mark before working back down. However the jump from September to October shows that employers are showing no immediate signs of slowing cost cuts.
The pending holiday shopping season will indicate whether consumers are going to be able to handle the high unemployment rate and go out to spend money, while the risk of job loss is evident.
The sustainability of an economic turnaround hinges on the strength of consumer spending.
There are now a record 5.6 million people that have been unemployed for six months or longer with the average time unemployed for those without jobs has reached 26.9 weeks. Thursday, Congress voted to extend unemployment benefits by up to 20 weeks.
The move to 10.2 percent in October is ahead of the pace that economists have forecasted.
Art Hogan, market analyst for Jefferies told StreetInsider.com that that important thing to note is the revised numbers tells another story, in that there have been 90,000 jobs revised from the past two months.
"The three month moving average of the nonfarm payroll number has gone from 220,000 down to 187,000, so we are moving in the right direction," Hogan said. "At the end of the day people don't think that 10.2 in the October month is going to get us to 11 in 2010. It probably peaks out at 10.5"
Stock markets is slighlty lower on the day, with the Dow down 0.4 percent at last check
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