Labor Department: 15+ million Americans now unemployed; highest jobless rate in 26 years

BY Brian Kates

Updated Friday, October 2nd 2009, 8:57 AM

Job fair

The nation's unemployment rate soared to 9.8 percent in September as the economy lost 263,000 jobs last month, bringing the total number of Americans out of work to a staggering 15.1 million, the Labor Department reported Friday.

September's rate rose from 9.7 percent in August, when 201,000 jobs were lost.

More than 500,000 unemployed people gave up looking for work last month and others settled for part-time jobs. If they were included, the unemployment rate would be 17 percent, the highest on record since 1994.

Despite economic gains from the Cash for Clunkers auto rebate probram and other federal stimulus efforts, most experts expect the jobless rate to continue to climb.

Federal Reserve Chairman Ben Bernanke said Thursday that even if the economy were to grow at a 3% pace in coming quarters, it would not drive down the unemployment rate quickly. He said the rate is likely to remain above 9 percent through the end of 2010.

Meanwhile, weekly wages fell $1.54 to $616.11, according to the Labor Department.

With consumer spending accounting for about 70 percent of the nation's economy, persistent high unemployment will slow recovery as Americans, concerned about lost income, tighten their purse strings, experts say.

And that, in turn, effects employers' hiring plans.

The Business Roundtable, a group of CEOs from large corporations, said earlier this week that only 13 percent of its members expect to increase hiring over the next six months.

Especially hard hit has been the service sector, which cut 147,000 jobs last month, more than double the 69,000 during the month before. Construction jobs fell by 64,000, more than the 60,000 eliminated in August. Retailers lost 38,500 jobs, compared to less than 9,000 in August.

Temporary help agencies eliminated 1,700 jobs, fewer than in the previous month, but still a sign of labor market weakness. Economists see temporary jobs as a leading indicator, as employers are likely to hire temp workers before permanent ones. ... e_in_.html