US unemployment at 26-yr high of 10.2%
Timothy R Homan. Washington
The unemployment rate in the US soared to a 26-year high of 10.2% in October and employers cut more jobs than forecast, underscoring why Federal Reserve policy makers say interest rates will remain near zero.
Payrolls fell by 190,000 workers last month, compared with a 175,000 drop anticipated by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed on Friday in Washington. The jobless rate gained from 9.8% in September and exceeded 10% for the first time since 1983.
Stock futures slid and Treasury notes gained on concern the emerging economic recovery will cool as American consumers retrench. Fed policy makers this week said the economy will probably "remain weak for a time" and reiterated a pledge to keep borrowing costs low for an "extended period."
"We will certainly have very bad payroll numbers in November and December," said Harm Bandholz, an economist at UniCredit Global Research in New York who accurately forecast the size of the drop in payrolls. "We don't foresee businesses going on a hiring spree anytime soon."
Revisions added 91,000 to payroll figures previously reported for September and August.
Monthly losses accelerated after the collapse of Lehman Brothers Holdings Inc. in September 2008 and peaked at 741,000 in January.
Friday's report showed factory payrolls dropped 61,000 after decreasing 45,000 in the prior month. The decline included a gain of 4,600 jobs in auto manufacturing and parts industries.
Payrolls at builders declined 62,000 after a loss of 68,000 in September. Financial firms cut payrolls by 8,000, after 9,000 reductions the prior month. Bloomberg

Tag: PAYROLLS, FORECAST, SEPTEMBER, MONTH, JOBS, SHOWED, PRIOR MONTH, BLOOMBERG, POLICY MAKERS, HIGH 102, DROP, PRIOR, MAKERS, UNEMPLOYMENT, POLICY, FIGURES, HIGH, FINANCIAL, NEWS, ADDED 91000, REVISIONS ADDED 91000,