BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Friday, 2 November, 2001, 17:50 GMT
US unemployment rockets
George W Bush speaking to manufacturing executives about the economy
Mr Bush hopes a $100m stimulus package will help revive the economy
US employment has fallen sharply in October in the wake of the 11 September terrorist attacks, according to government figures.

Jobs lost in the US:
415,000 October
213,000 September
54,000 August
The rate of unemployment rose from 4.9% in September to 5.4% in October, the biggest one month rise in 21 years and the highest rate since December 1996, the US Department of Labor reported.

"We clearly are now in the throes of nasty recession," said Bill Cheney economist at John Hancock Financial Services in Boston.

"Nothing dampens consumer confidence and spending like job losses, even if you aren't the one losing your job."

Across most industries

Over the month, the number of unemployed people increased by 732,000 to 7.7 million after a total 415,000 non-farm jobs were lost from the US economy.

This was "by far the largest of three consecutive monthly declines" in jobs, the Department said.

"The job losses in October were spread across most industry groups, with especially large declines in manufacturing and services."

The services industry lost 111,000 jobs in October, "the largest decline in the history of this series", while the recession hit manufacturing sector saw employment fall by 142,000, the fifteenth consecutive month of factory job losses.

"In October, large employment cutbacks continued in both electrical equipment and industrial machinery. These two industries have accounted for a third of the factory jobs lost since July 2000."

Reactions

"Companies are in survival mode and they are cutting jobs to control costs," said Clear View Economics economist Ken Mayland.

"The tragic events of 11 September and their aftermath probably tipped the economy into recession. People are waiting for the other shoe to drop."

"They are pretty bad and I think they are going to get somewhat worse in the next few reports," Axel Knutson at Tradingweapon.com told the BBC's World Business Report.

"[But] what we have to do is realise that these are temporary situations and that if government reacts to them positively...then I think we could come out of this very, very well."

"Part of the payroll decline reflected one-off effects from [11 September]," agreed Merrill Lynch chief economist Bruce Steinberg.

"But most of the job loss resulted from the weakening of economic activity that took place after 11 September."

"We have had approximately 100,000 people being laid off within the airline industry and in the support industries. What happens is it ripples through the rest of the economy," Brian Rainville of Teamsters Union told the BBC's World Business Report.

"What we need to do is increase the buying power of regular people, of workers...what we need is tax relief for the people who are hurting," he added.

Economic gloom

The rise in unemployment followed a string of bad economic news released this week.

Data released on Tuesday showed that confidence among US consumers had fallen to its lowest level since February 1994.

Then, on Thursday, US President George W Bush, in a speech to manufacturing executives urged Congress to push on with the introduction of a economic stimulus package worth up to $100bn, aimed to revive the country's economy.

The speech followed the release of data that revealed US output had shrunk for the first time in eight years.

Gross domestic product, or GDP, fell by 0.4% in the three months from July to September, the Commerce Department said.

The statistics were viewed as the first official indication that recession is on the way for the world's largest economy, after a record spell of economic expansion.

Recession is commonly defined as two consecutive quarters of negative economic growth.

The fall in US growth, from a rate of 0.3% in the previous quarter, was the largest since the first quarter of 1991 when the country was suffering its last recession.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Andrew Webb
"Unemployment is shooting up"
Stephen Fidler, Financial Times
"The attacks accentuated a situation which was already bleak"

Terror's impact

Signs of a slowdown

Rate cuts

Analysis

Key players

FULL SPECIAL REPORT
See also:

31 Oct 01 | Business
US economy shrinks
26 Sep 01 | Business
IMF warns on global economy
01 Nov 01 | Business
Job losses to hit 24 million
31 Oct 01 | Business
French jobless rate still rising
17 Oct 01 | Business
UK unemployment expected to rise
09 Oct 01 | Business
German unemployment rises
03 Aug 01 | Business
US unemployment remains steady
02 Nov 01 | Business
How the job market changed
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories