Employment Picture Looks Bleak
According to employment data released by the Labor Department today, the economy lost jobs once again in October. This in now the tenth straight month where employment has declined, a streak which began in January and which many expect to last for some time.
Nonfarm payroll employment fell by 240,000 in October, and the unemployment rate rose from 6.1 to 6.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. October’s drop in payroll employment followed declines of 127,000 in August and 284,000 in September, as revised.
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, job losses continued in manufacturing, construction, and several service-providing industries. Health care and mining continued to add jobs.
Some economist are predicting that unemployment will likely rise to at least 8% in the next few months and the financial crisis which intensified last month won’t help matters. Double digit unemployment isn’t out of the realm of possibility, seeing as how job losses have accelerated the past three months.
The Fed will probably cut interest rates once again after it’s next meeting and Congress will likely pass another stimulus package all in an effort to try to jump start the economy. The good thing is that energy prices are nearly back to the level they were last fall and a big part of why inflation never got out of control was the soft job market and the lack of wage pressure.
While the economy isn’t officially in a recession just quite yet, it did shrink finally last quarter and it could be the start of the worst economic downturn this country has seen since the 1980’s. From businesses to investors and consumers, everyone is holding back, it almost seems like the only one spending money these days is the federal government.
