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Jobless rate spikes, casting doubt on recent recovery
Friday, November 06, 2009 9:55 PM


(Source: Chicago Tribune)trackingWASHINGTON _ The nation's unemployment rate jumped to an unexpected 10.2 percent in October, throwing 190,000 more Americans out of work, raising questions about whether the budding economic recovery will endure, and confronting President Barack Obama with a politically explosive new challenge.

Not since 1983, after a double-dip downturn had sent the auto, steel and housing industries plunging, has the jobless rate gone so high. And many economists predicted it would go higher still in coming months.

Some 15.7 million workers now have no jobs, the government said in releasing its monthly unemployment report, and an estimated 5 million more are working fewer hours and drawing smaller pay checks than they were before the country fell into the worst recession in a generation.

In an effort to blunt the impact of the dismal news, Obama made a point of signing legislation Friday that provides additional aid for the jobless and expands and extends home buyer tax credits.

But few economists thought either measure would have a substantial impact on the worsening employment picture, or solve the president's increasingly urgent political problem: how to spur the creation of more jobs _ and quickly.

While most analysts had expected the unemployment rate to inch up from September's 9.8 percent, the October spike was larger than expected.

And it was particularly disturbing because it was not pushed up by a flood of new workers coming into the labor market, as often happens when the economy begins to climb out of a recession. Rather, the latest downturn resulted from continuing cutbacks among those with jobs.

"I'm more nervous about the staying power of the recovery after today's numbers," Mark Zandi, chief economist at Moody's Economy.com. He said he now expected joblessness to stay in double digits throughout next year, climbing to as high as 11 percent.

That level of unemployment, stretching as it does over most of the country instead of being confined to one hard-hit region like the "Rust Belt" of the 1980s, presents Obama and his Democratic colleagues in Congress with both economic and political challenges.

On the political front, a bad economy threatens the Democrats' control of Congress as the 2010 off-year elections approach.




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