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Unemployment Rises to 6.5 Percent, a 14-Year High

The unemployment rate shot up to 6.5 percent in October, marking its highest level in 14 years, according to the Department of Labor.

November 7, 2008
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The unemployment rate shot up to 6.5 percent in October, marking its highest level in 14 years, according to the Department of Labor.

That compared with a rate of 6.1 percent in August and September.

Nonfarm payrolls fell by 240,000 last month after September job losses were revised to 284,000, from the 159,000 originally reported.

August jobs losses were revised to 127,000, from 73,000.

U.S. payroll numbers fell by 1.2 million in the first 10 months of the year, including 651,000 since August.

Analysts were expecting an unemployment rate of 6.3 percent and a loss of 180,000 jobs.

“With the poor jobs data, you can now rule out the mild-recession scenario, and we are now leaning towards a severe recession,” said Jay Mueller, senior portfolio manager at Wells Capital Management Inc. of San Francisco. “The fourth quarter will be a very poor quarter, and I think we are looking at least another three quarters of bad data ahead.”

Goods-producing jobs fell by 132,000, while the manufacturing sector cut 90,000 positions and the construction sector shed 49,000 jobs.

On a positive note, the education and health services industries added 21,000 positions.

Filed by Aaron Siegel of Investment News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com

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