Friday, November 7, 2008

Unemployment Climbs to 6.5%

New figures from the Labor Department show significant employment deterioration, with 240,000 jobs lost in October and major upward revisions in job-loss figures for August and September. The unemployment rate jumped to 6.5 percent, a 14-year high, from 6.1 percent in September.

Employment has fallen by 1.2 million in the first 10 months of 2008; over half of the decrease has occurred in the past 3 months. In October, as would be expected by those with an understansing of Business Cycle Theory, job losses continued in manufacturing, construction, and employment in financial activities declined by 24,000 in October and is down by 200,000 since its peak in December 2006. Over the month, employment contracted in both credit intermediation and related activities (-12,000) and in securities and investment firms (-6,000)... Health care and mining continued to add jobs.

The unemployment rates for adult men (6.3 percent), adult women (5.3 percent), whites (5.9 percent), and Hispanics (8.8 percent) rose in October. The jobless rates for teenagers (20.6 percent) and blacks (11.1 percent) were little changed. The unemployment rate for Asians in October was 3.8 percent, not seasonally adjusted.

Given that Bernanke is only increasing money supply at moderate rates, the unemployment rate should continue to climb for at least the short-term.

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