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WASHINGTON — The unemployment rate has hit double digits for the first time since 1983 — and is likely to go higher.
The 10.2 percent jobless rate for October shows how weak the economy remains even though it is growing. The rising jobless rate could threaten the recovery if it saps consumers’ confidence and makes them more cautious about spending as the holiday season approaches. Texas’ jobless rate had edged up to 8.2 percent in September, the most recent available data for the state.The October U.S. unemployment rate — reflecting nearly 16 million jobless people — jumped from 9.8 percent in September, the Labor Department said Friday. The job losses occurred across most industries, from manufacturing and construction to retail and financial.Economists say the unemployment rate could surpass 10.5 percent next year because employers are reluctant to hire.President Barack Obama called the new jobs report another illustration of why much more work is needed to spur business creation and consumer spending. Noting legislation he’s signing to provide additional unemployment benefits for laid-off workers, Obama said, "I will not rest until all Americans who want work can find work."Tom Pauken, chairman of the Texas Workforce Commission, said Congress should pass legislation proposed by FedEx’s chairman, Fred Smith, that would allow companies making capital investments in the U.S. to write those off within a year — rather than a number of years — "while unemployment remains high.""Alternatively, Congress should reinstate the investment tax credit which allows for accelerated depreciation for capital investments in the United States," said Pauken, a Republican."Obviously, the Obama administration’s stimulus plan isn’t helping people get back to work," Pauken said. "Americans who have lost their jobs through no fault of their own do not benefit from what is shaping up as a jobless recovery."The government’s monthly unemployment report is based on two surveys, one of households, one of companies’ payrolls. The household survey showed that about 558,000 more people were unemployed last month than in September, raising the total to 15.7 million. The company survey, however, showed only a third as many job losses — 190,000.The disparity can be explained by the fact that the company survey doesn’t count people who are self-employed and undercounts employees of small businesses. That’s why some analysts, like Diane Swonk, chief economist at Mesirow Financial, say last month’s household survey could be an ominous sign for the economy.Troubles for small businesses could have a disproportionate effect on the economy, because they account for about 60 percent of the nation’s jobs. They tend to rely on credit cards and home equity lines to maintain their cash flow. Banks have tightened credit in many of these areas.Pauken said his proposals would help small business.
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