Jobless rate tops 10 percent for first time since '83

WASHINGTON — The unemployment rate has passed the psychological threshold of 10 percent for the first time since 1983 — and is likely to go higher.

Nearly 16 million people can't find jobs even though the worst recession since the Great Depression has apparently ended. Persistently high unemployment could hurt the recovery by restraining consumer spending, which accounts for 70 percent of the economy.

The report showed that the nation faces a jobless recovery — an economy that can't create jobs even though it is growing.

The unemployed rate jumped to 10.2 percent last month, the highest since April 1983, from 9.8 percent in September, the Labor Department said Friday. The economy shed a net total of 190,000 jobs, more than economists had expected.

The number of unemployed hit 15.7 million, up from 15.1 million. The job losses occurred across most industries, from manufacturing and construction to retail and financial. The job-loss total is based on a survey of businesses, separate from a survey of households that produces the unemployment rate.

Economists say the unemployment rate could reach 10.5 percent next year because employers remain reluctant to hire.

"It's a stark reminder of how much work remains to be done to get people back to work," Christina Romer, head of President Barack Obama's Council of Economic Advisers, acknowledged in an interview with The Associated Press.

Some positive signs emerged in the data, Romer said, pointing to a 34,000 increase in temporary service jobs.

"That's often the first sign of firms kind of dipping their toe back into hiring people," she said.

Still, counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 percent, the highest on records dating from 1994.

"It's not a good report," said Dan Greenhaus, chief economic strategist for New York-based investment firm Miller Tabak & Co. "What we're seeing is a validation of the idea that a jobless recovery is perfectly on track."

Friday's report is the first since the government said last week that the economy grew at a 3.5 percent annual rate in the July-September quarter, the strongest signal yet that the economy is rebounding. But that isn't fast enough to spur rapid hiring.

"You need explosive growth to take the unemployment rate down," Greenhaus said in an interview Thursday.