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UNEMPLOYMENT

U.S. jobless rate hits 10.2 percent

The nation's unemployment rate soared to 10.2 percent in October, putting pressure on Congress and President Barack Obama to do more to create new jobs.

From Miami Herald Staff

The national unemployment rate surpassed 10 percent for the first time since 1983, the government reported Friday, and is likely to go higher, giving greater urgency to efforts in Congress and at the White House to consider tax and other incentives to spur businesses to hire.

The October jobless rate of 10.2 percent reflected nearly 16 million unemployed people and was up four-tenths of a percentage point from September. Job losses occurred across most industries, from manufacturing and construction to retail and financial.

Many economists worry that persistently high unemployment could undermine the recovery by restraining consumer spending, which accounts for 70 percent of the economy.

Back in 1983, the economy soared nearly 8 percent after the recession ended -- a boom sometimes attributed to tax cuts by President Ronald Reagan. The jobless rate fell by 2.5 percentage points that year.

But the economy is unlikely to improve that fast this time, as consumers remain cautious and tight credit hinders businesses.

In fact, many analysts expect economic growth to moderate early next year, as the impact of government stimulus programs to boost home and car buying fades.

``The job market isn't deteriorating as fast as it was earlier in the year, but it isn't going to improve until next spring at the earliest,'' said Mark Zandi, the chief economist for forecaster Moody's Economy.com in West Chester, Pa.

REDUCING PAYROLLS

Sageworks, a financial firm that specializes in data about privately held companies, reported Friday that small firms will keep cutting payrolls.

``They're going to reduce their overhead. They're going to reduce their payroll. They represent at least 50 percent of the employment in the United States, and that doesn't look like it's coming back anytime soon,'' Drew White, chief financial officer, told McClatchy.

Indeed, smaller firms account for the bulk of employment in Florida, which already has hit double-digit unemployment.

The Institute for Economic Competitiveness at the University of Central Florida is predicting massive job losses in the state through the end of the year, with unemployment peaking at 11.2 percent next year.

UCF economist Sean Snaith sees the state unemployment remaining above 10 percent through the first quarter of 2012.

The state's overalljobless rate hit 11 percent in September, up two-tenths of a percentage point from the previous month, and was the highest since 1975.

Local rates were 11.3 percent in Miami-Dade County, 9.8 percent in Broward and 7 percent in Monroe.

South Florida unemployment figures for October are scheduled to be released Nov. 20.

``History tells us that job growth always lags behind economic growth,'' President Barack Obama cautioned in a statement from the White House Rose Garden, shortly after he signed a new $24 billion economic stimulus bill into law.

BENEFITS EXTENDED

The measure provides tax incentives to home buyers and extends by 14 weeks benefits for the longtime unemployed. The House of Representatives passed the measure 403-12 Thursday in a rare bipartisan vote, a day after the Senate passed it unanimously.

Obama called the October jobless report ``a sobering number that underscores the economic challenges that lie ahead. . . . I won't let up until the Americans who want to find work can find work and until all Americans can earn enough to raise their families and keep their businesses open.''

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