Unemployment hits 26-year high in US

by 15 Sep 2009

The US unemployment rate surged to 9.7 per cent in August, its highest level since 1983.

However, although the jobless rate rose more than expected in August, the economy shed only a net total of 216,000 jobs, less than July’s revised 276,000 and the fewest monthly losses in a year, according to recent US Labor Department data.

“It’s good to see the rate of job losses slow down,” said Nigel Gault, chief US economist at IHS Global Insight. But, he predicted that the country was still on track to hit 10 per cent (unemployment) before the slump was reversed.

The poor job market will make it hard for the economy to begin a sustained recovery and because economists are predicting the recovery is likely to be weak, most companies are likely to hold back from aggressive hiring.