US economy: US unemployment rate drops to 9%

4 November 2011

Image caption,

The unemployment rate has remained around 9% for several years

The US unemployment rate, which has remained stubbornly high, dropped to 9% in October from 9.1% the month before.

The US added 80,000 new jobs in October, the Department of Labor said, less than had been forecast.

But the world’s largest economy added 158,000 jobs in September, more than the original estimate of 103,000.

Sluggish growth and high unemployment are key issues for President Barack Obama and his Republican rivals as the country enters an election year.

In September, Mr Obama unveiled a $450bn (£282bn) package of spending plans aimed at creating jobs. But that plan has been held up in a much-divided Congress.

Earlier this week, the Federal Reserve cut its forecast for US growth and increased its expectation for unemployment next year.

The Fed anticipates unemployment falling only to 8.5%-8.7% next year. It had previously predicted a fall to 7.8%.

‘Recovery of turtles’

The Department of Labor said that, over the past 12 months, employment had increased by an average of 125,000 per month.

But economists had predicted the US would add 95,000 jobs last month.

“I was actually expecting something better than consensus, so this is another disappointing month,” said Patrick O’Keefe, director of economic research at JH Cohn.

“That it is this small at this point in the recovery is an indication that this is a recovery of turtles, not a recovery of greyhounds.”

The unemployment rate was last at 9% in April this year, and peaked at 10.1% in October 2009.

The bulk of jobs in October was added in business services – such as temporary help services and technical consulting – and in leisure and hospitality.

The number of long-term unemployed who have been without a job 27 weeks or more dropped slightly to 5.9 million, or 42% of the total unemployed.

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