Jobless Rate Hits 26-Year High, but Hints of Recovery Remain

JIM LEHRER:

Unemployment surged higher in August to 9.7 percent, the worst in 26 years. But job losses slowed.

Ray Suarez has our lead story report.

RAY SUAREZ:

Unemployment lines then and now. The early 1980s was the last time the jobless rate was this high, until last month. The increase from July was three-tenths-of-a-point. The Labor Department said more people who had given up looking for jobs returned to the hunt, and now count as unemployed.

Overall, there are 14.9 million Americans out of work. The economy has lost a net total of nearly seven million jobs since the recession began in late 2007. Some of those losses came in August, as employers shed 216,000 jobs. But that was the smallest total loss since August of last year.

In Washington, Vice President Biden said again, that's still too many.

U.S. VICE PRESIDENT JOSEPH BIDEN:

Two hundred and sixteen thousand people lost their jobs last month, much too high, but roughly two-thirds of the job loss we saw on a monthly basis when we took office, and the lowest that it's been in a year.

Now, I don't want — I want to be clear about something. Less bad is not good. That's not how President Obama and I measure success.

RAY SUAREZ:

There's another concern: Unemployment benefits for 1.3 million Americans will run out by the end of the year, unless Congress or the states authorize extensions.

And across the country, state governments are hurting as well. Many are imposing furloughs or laying off workers altogether to cover deep budget deficits.

Just yesterday, Rhode Island Governor Don Carcieri announced he will lay off 1,000 state employees, after a judge blocked furlough plans.

GOV. DONALD CARCIERI, R-R.I.:

If everybody just agreed to take a very small pay reduction this year, we wouldn't have to do that. But I — all I know is, every day that goes by, the situation is getting worse; it's not getting better.

RAY SUAREZ:

Sharon Moreno is one of the workers who could lose her job.

SHARON MORENO:

This is not my funny. It really isn't. This is my job, and I need it.

RAY SUAREZ:

There have been some encouraging signs. Chrysler and General Motors have begun calling back limited numbers of workers.

Wall Street took the report in its stride. The Dow Jones industrial average gained 96 points, to close at 9,441. The Nasdaq rose 35 points, to close at 2,018. For the week, the Dow lost 1 percent. The Nasdaq fell half-a-percent.

For a closer look at this jobs report and the larger unemployment picture, we're joined by Lisa Lynch, dean of the Heller School for Social Policy and Management at Brandeis University and former chief economist at the Labor Department.

Dean Lynch, as you sift through the latest figures, what portrait does that paint overall of the job market?