Unemployment up up up

U.S. Jobless Rate May Reach 10.5% by End-2010, Goldman Says
Share | Email | Print | A A A

By Simone Meier

Oct. 8 (Bloomberg) -- The U.S. unemployment rate will probably rise to 10.5 percent by the end of 2010 as the world’s largest economy struggles to recover from the worst recession in over six decades, Goldman Sachs Group Inc. said.

“It will take several years to return to ‘normal,’ mid- single-digit unemployment rates even if the economic and labor market recovery proves to be very strong,” Andrew Tilton, a Goldman economist in New York, said in an e-mailed note today. “The financial crisis and recession have been a disaster for the U.S. labor market,”

Job losses accelerated last month and the unemployment rate climbed to 9.8 percent, the highest level since 1983. President Barack Obama said earlier this month he’s working to “explore any and all additional measures” to spur growth. Mounting job losses also underscore forecasts for the Federal Reserve to keep its benchmark interest rate near zero through next year.

September’s losses bring total jobs lost since the recession began in December 2007 to 7.2 million, the biggest decline since the Great Depression.

“Current levels of unemployment are economically and politically unacceptable,” said Tilton. “The state of the labor market in late 2010 is likely to be a major factor in the midterm Congressional elections.”