The latest US employment figures were much worse than expected, underscoring the steep slide into recession of the world’s biggest economy. There were 240,000 jobs lost in October, particularly in manufacturing and the service sector.
The August and September numbers were also revised upwards, indicating an increasing deterioration in labour markets and adding to the likelihood of a deep recession. The jobless total has risen for the last 10 months. It is now at 6.5 percent of the working population, the highest level since March 1994.
Standard and Poor’s analyst Alec Young said that is a daunting total for the markets: “The US is clearly in a recession and the economic data and the corporate news that we’re getting signals there’s no relief in sight and that’s really stymieing any kind of attempts at lasting rallies in the Dow Jones and S&P 500.”
To head off further job losses, it is expected the US central bank, the Federal Reserve, will make deeper interest rate cuts. Fed chairman Ben Bernanke continues to pump money into the US banking system to encourage the banks to lend more.
The amount that they charge each to lend money continues to fall as the credit freeze thaws, but it is happening slowly and economists said it has a way to go yet before playing into any economic recovery.