US president hails end of government’s role as majority shareholder in car manufacturer as it raises $20.1bn.
|The figures are a blow to the US administration’s hopes for an end to continuingly high unemployment [AFP]|
The US unemployment rate has hit an unexpected seven-month high, prompting renewed fears about the country’s economic recovery.
Unemployment rose to 9.8 per cent in November, according to figures from the US Labour Department on Friday.
The news sent the dollar tumbling and dealt a blow to the US administration’s hopes for an end to the country’s continuingly high unemployment.
The department’s figures showed only 39,000 jobs were created in November. That is well below the 130,000 that had been predicted by economists and is far from enough to dent the unemployment rate.
The White House, which is under pressure to prove its economic policies are working, acknowledged the unemployment rate was “unacceptably high”.
‘Bumps in the road’
Massive government stimulus plans, while alleviating the worst of the downturn, have failed to bring unemployment levels into line with those seen over the last decade.
But Austan Goolsbee, one of the top economic advisers to Barack Obama, the US president, warned it was “important not to read too much into any one monthly report”.
“Although the overall trajectory of the economy has improved dramatically over the past year, there will surely continue to be bumps in the road ahead such as this,” he said.
While the high rate of joblessness is a constant worry for the eight-plus million Americans who lost their jobs during the crisis, policymakers are increasingly concerned about how long the trend has persisted.
Nearly 40 per cent of those unemployed have remained out of work for more than six months, and fears are growing that high unemployment rates may be more than a temporary result of the recession.
Eric Cantor, a Republican legislator in the House of Representatives, said: “Today’s jobs report marks the 19th consecutive month in which unemployment has exceeded nine percent, an unacceptable result.”
He also urged Congress to extend tax cuts put in place under George Bush, the former president.
Supporters argue the cuts will help spur the recovery, but critics say the US, already struggling with its deficit, can ill afford them.
Alongside tax cuts, debate has raged over unemployment benefit, with the White House warning that unless Congress extends unemployment benefit to the long-term unemployed, millions of Americans could see their incomes slashed.