MercoPress. South Atlantic News Agency

US shocked by rising unemployment; fears of consumer confidence erosion

Have a buck to spare? Number of US jobless totals 15.1 million.

The United States economy lost 263.000 jobs in September, which was more than had been expected, according to official non-farm payrolls figures. The jobless rate rose to a fresh 26-year high of 9.8% from August's figure of 9.7%.
The number in employment has now fallen for 21 consecutive months.

There was more bad news from the Labour Department, which revised its figures for July and August to show 13,000 more jobs lost than previously reported.

The economy as a whole is expected to have grown in the past three months, but recovery in the jobs market tends to lag behind the rest of the economy.

Since the start of the recession in December 2007, the number of people out of work has risen by 7.6 million to 15.1 million.

“Together with the ISM data, delinquencies data and even the consumer confidence data we had, we're starting to see a pattern of weakness emerge,” said Kevin Caron, market strategist at Stifel, Nicolaus & Co in New Jersey.

“We saw a lot of artificial involvement by the government to prop up the markets, and now that that is starting to end the private sector isn't yet showing signs of life.”

Government employment, which has been one of the factors boosting the economy in the past year, fell by 53,000 in September. The other big areas of job losses were construction, manufacturing and retail.

“It shows expectations for recovery may have gotten a little ahead of the reality,” said Gary Thayer at Wells Fargo Advisors in Missouri.

“The trend is still improved from earlier this year, but employers need to feel more confident about the economy before they start hiring again.”

The US is not alone in seeing rising unemployment, with the 16 nations that use the euro announcing on Thursday that its seasonally adjusted rate rose to 9.6% in August, putting the number of people without a job at 15.2 million.

Earlier on Friday, Japan unexpectedly announced that its jobless rate had fallen to 5.5% in August from July's record high of 5.7%, but the number of people unemployed still hit a six-year high of 3.61 million.

Meantime in related news the Big Three US car firms saw their sales fall in September, as they suffered a hangover from the end of the “cash for clunkers” scrappage scheme.

General Motors reported the biggest decline, with its sales dropping 45% from a year earlier, while Chrysler's fell 45%, and Ford's slipped 5%.

The falls came after the scrappage scheme ended on 24 August.

This gave customers a cash incentive to trade in their old cars for new ones, lifting US sales in July and August.

The 3 billion US dollars Car Allowance Rebate System offered customers 3.500 USD towards the cost of a new vehicle. A similar scheme is continuing in the UK.

Ford's decline in sales was much less severe than its rivals, as it was helped by the popularity of its newly launched Taurus model.

Japanese firms also saw their US sales fall in September, with Toyota's down 13% and Nissan's falling 7%. South Korea's Hyundai bucked the trend, with its sales for the month adding 27%. (BBC).-