U.S. Job Rate Lowest in 26 Years

Despite signs the near two-year U.S. recession may be over – Americans are still finding it hard to get a job.

The closely-watched unemployment rate soared more than expected to 9.7 percent in the month of August, a 26-year high, according to the Labor Department.

Job seekers were actually lured back into the jobs market after the surprise drop in the unemployment rate the month before, says John Lonski, chief economist, at Moody’s.

[John Lonski, Chief Economist, Moody’s Investor Service]:
„During the early months of an economic recovery, we find that more individuals are drawn into the labor force, but they don’t find jobs right away, so they are included among the unemployed automatically and that has the effect of lending an upward bias to the unemployment rate.“

Although jobs were hard to come by last month, there are signs the labor market is getting better.

The U.S. economy lost a fewer-than-expected 216,000 jobs last month, the smallest job cuts in a year, but July’s numbers were upwardly revised.

Since the start of the recession, the U.S. economy has shed 6.9 million jobs.

Labor Secretary Hilda Solis says the White House will continue its efforts to soften the blow.

[Hilda Solis, U.S. Labor Secretary]:
„We are going to stay steady and we’re going to try to help those people that have lost their jobs, those people that are in part time jobs that want to look for full-time, and also help people get into training programs
and now is the time to do that, invest in themselves.“

But with the unemployment rate headed towards 10 percent, economists worry consumers may cut back spending in fear, making it harder for the economy to regain its footing.

(NTDTV)