Fed chief says economy improving as retail sales surge but warns no full recovery yet.
About 7.2 million jobs have disappeared, eliminated since the recession began in December 2007, the report said.
The latest figures are in spite of indications that the US is beginnig to recover from its deepest recession since the 1920s and 1930s.
“If they are struggling, they’re not consuming. That just takes some of the legs out of recove”
Brian Fabbri, North American chief economist for BNP Paribas
Economists have warned that the pace of economic recovery will be slow, given that consumers are spending less due to concerns about job losses.
“Consumers … are going to struggle to increase their income,” Brian Fabbri, North American chief economist for BNP Paribas, said.
“If they are struggling, they’re not consuming. That just takes some of the legs out of recovery.”
A protracted period of high unemployment is a challenge to Barack Obama, the US president, whose administration rolled out a $787bn economic stimulus package.
The plan, which has been widely attacked by Republicans as interference into the financial markets, is intended to “save or create” 3.5 million US jobs by the end of 2010.
Protracted high unemployment
Christina Romer, chair of the president’s council of economic advisers, said that although the unemployment rate is increasing, the number of job losses month-by-month is shrinking.
“We’re going from much larger job losses earlier this year. They are moderating. We want them to moderate more,” she said.
But Republicans have seized on the fact that job losses have continued despite the stimulus package.
“Wasteful government spending is not the solution to what ails this economy,” Mike Pence, chairman of the House Republican Caucus, said.
Ben Bernanke, the chairman of the US Federal Reserve, said on Thursday that the US unemployment rate would not fall quickly even if the economy were to grow at a 3 per cent pace.
Bernanke said the jobless rate will probably stay above nine per cent throughout 2010.