Nation's Jobless Rate Hits A 14-Year High
RENEE MONTAGNE, host:
This is Morning Edition from NPR News. I'm Renee Montagne. We have new unemployment numbers this morning, and the news is not good. The jobless rate rose to 6 and a half percent last month, and the number of jobs lost was a lot higher than expected. That's according to the latest jobs report from the Labor Department. It indicates that the downturn in the economy this year has been even deeper than most economists had expected. NPR's Jim Zarroli joins us now live from our New York bureau. Good morning.
JIM ZARROLI: Good morning, Renee.
MONTAGNE: Jim, what do the numbers tells us about how weak the employment market has become?
ZARROLI: Well, I think dismal is the word for this. The overall unemployment rate went from 6.1 percent in September to - as you pointed out - 6 and a half percent, which is the highest rate since March of 1994. The number of jobs lost was 240,000, which was considerably above what had been expected. Not only that, but the government also said there were 179,000 more jobs lost in August and September than we had thought earlier. So all together, the economy this year has lost 1.2 million jobs and half of that was in the last three months. So this is, you know, just a week report. It confirms what everybody probably already knows. The housing crunch, the credit crisis, the downturn in the stock market, they have all done just a lot of really serious harm to the economy.
MONTAGNE: And talk to us about those lost jobs. Were they spread throughout the economy?
ZARROLI: No. They were really almost in every sector of the economy. Manufacturing lost 90,000 jobs in October. Construction lost 49,000. Professional and business services, 45,000. We're really just seeing a broad slowdown in the economy. It's striking a lot of different companies, and it's happening really fast. We appeared to have a kind of rebound in the middle of this year. Thanks in part probably to the economic stimulus package. But once the effects of that worked their way through the economy, things begin to deteriorate very quickly, and we got to the position that we're in right now.
MONTAGNE: How long do economists expect the unemployment rate to keep going up?
ZARROLI: Well, I think a lot of them are saying now that the unemployment could go to eight percent or maybe above that next year. The problem is that almost every day, we have more companies announcing lay-offs. Circuit City, GlaxoSmithKline, Cox Communications, they are just a few of the companies who do so recently. The auto industry is a big generator of jobs. Ford Motor Company came up today and said it was cutting more than 2,200 more jobs, and this is really being - you could see the effects of this throughout the economy.
Yesterday, we had a series of really terrible reports from big retailers like Neiman Marcus, like Abercrombie and Fitch. Internet retailers like Amazon say their revenues are down. Obviously, when consumers lose their jobs or when they start to worry that they're going to lose their jobs, they don't spend as much, and this is just happening at the worst possible time because the holiday shopping season is approaching.
MONTAGNE: And Jim, what does a weak jobs report mean for the incoming administration whose inauguration is approaching? I mean, will it force President-elect Obama to reassess his priorities?
ZARROLI: Well, it means that the Obama administration isn't going to have much time to get its seat. It's really just going to be thrown into the middle of an economic storm, and it really means that whatever else the administration wants to do, fixing the economy is going to have to be a priority. The president-elect is going to meet today with some of his advisers to start to talk about the economy's problems. He'll be talking with some former cabinet officials and corporate executives. Warren Buffett is supposed to participate. So, they have to decide what to do.
You know, they're going to have to discuss how to fill important jobs like Treasury secretary. They're also going to have to talk about an economic stimulus plan. The last stimulus plan was a tax rebate, but a lot of Democrats want this one to go into infrastructure projects, to go toward the states. So the administration is really going to have to wrestle with some long-term problems.
MONTAGNE: NPR's Jim Zarroli is speaking to us from New York. Thanks very much.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.