WASHINGTON - The U.S. unemployment rate hit 9.8 per cent in September, as employers cut 263,000 jobs.
That was 83,000 more lost jobs last month than the 180,000 predicted before the official government report was issued Friday morning but there's a widespread expectaton that the U.S. unemployment rate will eventually top 10 per cent.
The U.S. Labour department's report is evidence that the longest U.S. recession since the 1930s is still inflicting widespread pain.
The Labour department said a total of 15.1 million Americans are now out of work.
More than a half-million unemployed people gave up looking for work last month. Had they continued searching, the official jobless rate would have been higher.
Many analysts expect the economy grew at a healthy clip in the July-September quarter, technically ending the recession, but few think the recovery will be strong enough to lower the jobless rate. Most economists expect the rate to top 10 per cent and keep climbing.
Employment recovery tends to lag economic growth, largely because employers are uncertain about what lies ahead and remain cautious about hiring additional peopla and other spending.
The American economy has received a boost from the Cash for Clunkers auto rebate program and other government stimulus efforts, but many economists believe that growth will slow in the current quarter and early next year as the impact of those programs fade.
Federal Reserve Chairman Ben Bernanke said Thursday that even if the U.S. economy were to grow at a 3 per cent pace in the coming quarters, it would not be enough to quickly drive down the unemployment rate. Bernanke said the rate is likely to remain above nine per cent through the end of 2010.
Persistently high unemployment could weaken the recovery as consumers, concerned about their jobs and incomes, restrain spending. Consumer spending accounts for about 70 per cent of the nation's economy.
Hourly earnings rose by a penny last month, while weekly wages fell $1.54 to $616.11.
The average hourly work week fell back to a record low of 33 in September, the department said. That figure is important because economists are looking for companies to add more hours for current workers before they hire new ones.
