US employers cut payrolls by a much steeper-than-expected 240,000 jobs in October as the unemployment rate shot up to its highest in more than 14 years, underscoring the economy's steep slide.
According to the the Labor Department's report today, last month's job cuts followed a steeply revised cut of 284,000 in September, the most severe monthly loss since November 2001 just after that year's September terror attacks.
The department also revised August job cuts higher to 127,000 - meaning a total 179,000 more jobs were cut in August and September than previously thought.
The national unemployment rate jumped to 6.5 per cent from 6.1 per cent in September, the highest since March 1994.
"We have entered the phase of serious recession conditions. Unfortunately we will encounter more of this going forward," said Richard DeKaser, chief economist for National City Corp. in Cleveland. "This is going to increase the urgency for another stimulus package to staunch the slide."
October job cuts were much worse than forecast by Wall Street economists, who had expected 200,000 would be cut and that the unemployment rate would be 6.3 per cent.
US stock futures pared gains after the data, while the dollar extended losses. US Treasuries turned negative after the report.
So far this year, 1.2 million US jobs have been lost - 651,000 of them in the past three months alone - in a sign that a deterioration in labor markets may be gaining steam and heightening odds of deep recession.
In manufacturing alone, a whopping 90,000 jobs were cut in October - a period when 27,000 Boeing assembly workers were on strike. That followed a loss of 56,000 factory jobs in September.
Service-producing industries cut 108,000 jobs in October on top of 201,000 lost in September. Construction industries dropped 49,000 more jobs after eliminating 35,000 in September, many of them in specialty trades related to home building, the department said.
Average weekly hours of work held steady at 33.6 in October. At factories, the average workweek also held steady at 40.6 hours, while overtime was unchanged at 3.6 hours.
Reuters