US jobless rate reaches new high
Ford motor company set to cut 10 per cent of US jobs in new blow to economy.
The latest data appears to underline the severity of the economic downturn under way in the US, where months of turmoil on stock markets, tightening of credit and low consumer confidence have taken their toll.
“Employment has fallen by 1.2 million in the first 10 months. Over half of the decrease has occurred in the last three months,” the US department of labour said in a statement released on Friday.
Al Jazeera’s John Terrett in New York said the figures were much worse than expected.
“The US economy can add 400,000 new jobs a month in the good times. Ford and GM have been trapped … the credit crunch means day-to-day borrowing costs are high … while their customers can’t get loans to buy vehicles,” he said.
Government plan
The jobless figures also reveal the challenge for Barack Obama, the US president-elect, who was to meet his economic team before giving his first post-election news conference on Friday.
So far this year, 1.2 million jobs have been lost in the US, 651,000 in the past three months alone, heightening chances of a deep recession.
Ian Shepherdson, an analyst at High Frequency Economics, said: “The unemployment rate … is likely to breach the seven per cent mark early next year.
“It has already broken above the June ’03 peak and the trend is rising almost vertically.”
Momentum for a tax and spending plan to boost the flagging US economy is growing following Obama’s election, and the president-elect expressed support for a new economic stimulus package during the campaign.