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Unemployment, Job Losses Jump in October

by Adam Price |
November 2, 2008
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San Jose, CA - On Friday, Nov. 6, the Department of Labor gave a dismal report on the labor market in October, with the unemployment rate jumping to 6.5% from 6.1% in September, the highest rate in 14 years. At the same time businesses cut 240,000 jobs in October, pushing the total job losses to 1.2 million this year. Even worse, the report made corrections to August and September’s figures - both almost doubled the job losses, from 73,000 to 127,00 in August and from 159,000 to 284,000 in September. A day earlier, a report on unemployment insurance claims showed that the number of people receiving benefits jumped by 122,000 in one week to highest level since 1983. This report suggests that the October job loss figure could be revised even higher.

As bad as it was, the official figure understates the actual pain among workers, as it does not count people whose hours of work have been cut or who have given up looking. A broader measure of underemployment that includes these two groups rose from 11% in September to 11.8% in October. The length of unemployment for a typical jobless worker rose to 10.6 weeks, and more than 22% of unemployed had been without work for more than six months.

The report showed job cuts in most industries, from construction, to manufacturing, retail trades, hotel and restaurants, finance and professional and business services. The only significant job gains were in health care and local schools. But with state and school budgets falling into the red across the country, even these gains are at risk.

Latinos and women led the rise in unemployment. Unemployment among Latinos rose by a full percentage point in October, from 7.8% in September to 8.8% in October, double the increase of white workers. The increase in the unemployment rate for women was also twice that of men, with the unemployment rate for adult women climbing from 4.9% in September to 5.3% in October.

The increase in unemployment is causing severe hardships among more and more working families. Utilities across the country are reporting increases in late payments and shutoffs. Perhaps the worst situation is in Michigan, where disconnection for lack of payments on electrical bills has gone up 39% as compared to 2007. Michigan has had one of the highest unemployment rates in the country, with more than 8% official unemployment since May. In another sneaky corporate maneuver, southern California utilities have been installing ‘smart’ electronic meters that eventually will allow consumers to monitor their own power use - but are allowing the utility to shut off power electronically without having to send out a technician.