Unemployment hits multi-decade highs

The inevitable outcome of an economic recession is rising unemployment. By how much depends on the severity of the economic downturn. Well, judging by the numbers this recession is pretty severe. Financial Times reported the following story:

US unemployment climbed to 8.9 per cent in April, its highest level in a quarter of a century, as the economy shed more than half a million jobs, official figures revealed on Friday.

The latest non-farm payrolls data showed that 539,000 jobs were lost in April, making it the seventh-worst month for job losses in half a century. The decline was down from a revised 699,000 loss the previous month and the smallest monthly loss total since last October.

“While it is somewhat encouraging that this number is lower than it has been in each of the past six months, it is a sobering toll,” said Barack Obama, US president. “It underscores the point that we are still in the midst of a recession that was years in the making and will be months or even years in the unmaking.”

Analysts said some slowing in the pace of job losses was consistent with the idea that the rate of decline in the US economy was slowing. However, the jobs report confirmed that the US labour market was still very far from stabilising.

Over the past six months, the US economy has lost 3.94m jobs – the most in any similar period since records began, exceeding even the job losses caused by demobilisation after the second world war.

Analysts said the rate of initial unemployment claims looked to have peaked, suggesting job losses would be lower in the coming months, but that unemployment was likely to rise well into next year.