Transcripts

Unemployment Rate Returns to Triple Digits

SUSIE GHARIB: The nation's unemployment rate stands at 10.2 percent tonight, the first time it's hit double digits in 26 years. President Obama called the new statistic quote, a sobering number. And no matter how you look at the October job numbers, they are sobering. American businesses cut 190,000 jobs. They have reduced payrolls for 22 straight months. The total number of jobs lost in the recession has now reached 7.3 million. This latest employment report shows that the job market is still weak, even though there are other signs of improvement in the U.S. economy. Erika Miller reports.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: One out of every 10 workers in America is not working and not by choice. Today's data show almost 16 million of people are looking for jobs, a harsh reminder of the pain caused by the great recession. Economist Bruce Kasman warns things are likely to get worse.

BRUCE KASMAN, CHIEF ECONOMIST, JPMORGAN: I think it's a reasonable chance that by the time the labor market reaches its worst point, we are actually going to have the worst labor market we've had in the United States since the great depression and that's a pretty sobering reality.

MILLER: Speaking of sobering, by one measure, the jobless rate is actually closer to 17.5 percent. That's the figure if you include part- timers who would rather be full-time and people so discouraged looking for work, they've given up. However, today's report did have some glimmers of hope. Though the economy lost 190,000 jobs last month, that's still well below January's peak. Economist Milton Ezrati says the creation of 34,000 temporary positions in October is also a positive sign.

MILTON EZRATI, ECONOMIST, LORD ABBETT: What happens is-- at a turn in the economy -- and I think there's good evidence that we are seeing a turn toward growth. Business, of course, is very wary and they're not likely to increase their staple payroll, their own payroll, until they are really sure that new sales levels are climbing and that they have secured a higher level of activity.

MILLER: The big unknown is how the Federal Reserve will interpret today's data. The central bank may be reluctant to raise interest rates while the unemployment rate is going up. But the Fed will have to weigh the jobs data against recent positive reports, including the rise in third quarter GDP suggesting recovery is underway.

EZRATI: I think the Federal Reserve is in a bind now. They want very much to change policy to start reabsorbing all the excess liquidity they've poured on the markets, but they know from a political point of view and from an economic management point of view -- it's not all politics -- they really can't move until they see some improvement in the labor market.

MILLER: An improvement in the labor market is not expected anytime soon. Some economists predict two or three years from now, the unemployment rate will still be around 9 percent. Erika Miller, NIGHTLY BUSINESS REPORT, New York.