The Department of Labor announced on November 6 that the US lost another 190,000 jobs in October, resulting in the unemployment rate reaching a new peak of 10.2%, a 0.4% increase from the 9.8% September figure, and the highest number of jobless workers in the US in 26 years.
Though many economists last month pointed to “positive signs” in the economy, offering upbeat opinions that the US economy had “bottomed,” and that a “recovery” was underway, the new jobless figures underscore the fundamental weakness in the economy, and remain a cause for concern as consumer confidence, a prime source of economic well-being, remains weak.
Despite the grim job numbers, many experts remain optimistic about the prospects for recovery, citing a slowing in the rate of growth of joblessness nationwide as evidence of a nascent, if glacial, recovery. The New York Times cited Allen L. Sinai, the founder of research firm Decision Economics, as noting: “There’s no doubt that the slashing and burning of jobs has abated quite a lot. The economy is recovering, but it is a very soft recovery.” According to the Labor Department, new jobless claims fell to 512,000 last week, the lowest level in 10 months.
In anticipation of the negative numbers, Congress reacted swiftly on Thursday, voting to extend jobless benefits to provide up to 14 weeks of additional assistance to unemployed people who have exhausted their state and federal benefits, and up to 20 additional weeks to those in states with unemployment rates exceeding 8.5 percent, according to the Times. Congress' action comes just in the nick of time for the 600,000 jobless workers whose benefits stopped in October. The new legislation boosts maximum combined state and federal unemployment benefits to a longest-ever period of 99 weeks.
In predicting whether or not a recovery is underway, the initial claims rate is a key number, closely watched by economists as a bellwether indicator. Experts agree the rate must fall below 400,000 to signal a reversal in the job market.