Unemployment is likely to rise, say economists The US jobless rate rose to 6.5% in October, official figures have shown, the highest rate since March 1994. Figures from the US Labor Department showed US employers cut 240,000 jobs in October, the 10th month in a row that the economy has lost jobs. The increase means that in the first 10 months of this year, 1.2 million people in the US have lost their jobs. US President George W Bush said the figures reflected "the difficult challenges confronting our economy". "We are in the midst of a global financial crisis, and tight credit markets have made it harder for businesses to borrow the money they need to meet their payrolls, grow, and create new jobs," he said. "The Federal government has taken aggressive and decisive measures to address this situation." But he said it would take time for the stimulus measures to have their full impact on the economy. Revised figures Some economists predict the jobless rate could climb to 8%, or possibly higher, next year. Job losses in August and September turned out to be much deeper than initially estimated by the Labor Department. Employers cut 127,000 positions in August, compared with 73,000 previously reported, while 284,000 jobs were axed in September, compared with the first estimate of 159,000 jobs. The revised figures for September showed the biggest monthly cut in jobs since November 2001. Worsening economy The employment market is much weaker than economists expected. They were forecasting the unemployment rate to climb to 6.3% in October and for payrolls to fall by about 200,000. The department said 481,000 people in the US filed new claims for jobless benefits in the last week of October. On Friday, car giant Ford announced plans for more job cuts after reporting third quarter operating losses of $2.98bn. The firm it would cut its salary costs by an additional 10% by the end of January 2009. Racing to assemble his new Democratic cabinet, President-elect Barack Obama will meet with economic advisers later on Friday. His team has been in close contact with the Bush administration to pave the way for a smooth handover of power. All the economy's woes - a housing collapse, mounting foreclosures, hard-to-get credit and financial market upheaval - will confront Mr Obama when he assumes office early next year - and the employment situation is likely to get worse. In the 1980-1982 recession, the unemployment rate rose as high as 10.8% before coming down.



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