US jobless total at 14-year high

Friday 7th November 2008

The US unemployment rate has grown to its highest level since 1994, new official data show.

The jobless rate rose from 6.1 per cent to 6.5 per cent – as 240,000 jobs were cut in the US economy – the tenth monthly rise in unemployment in a row.

The number of long-term unemployed, those jobless for 27 weeks or more, rose by 249,000 to 2.3 million.

Job losses continued in manufacturing, construction and several service industries. Health care and mining continued to add jobs.

Some 1.2 million US citizens have lost their jobs this year – with over half of the decrease occurring in the past three months - as the US economy heads into recession leaving Barack Obama with a major challenge as he enters the White House in January.

Paul Niven, head of asset allocation at F&C, said: "Obama faces huge challenges on the economy, with the credit crisis threatening a deep and long recession and the escalating cost of the ‘war on terror' also pressurising government finances.

"It appears as if the economy was by far the most important issue for voters in the election.

"With significant majorities, it is likely that Obama will move decisively to tackle the immediate economic issues with the most significant action to be taken in the near term being a material fiscal stimulus package, probably in excess of $200 billion."

Mr Obama plans to invest over $25 billion on infrastructure, spent on roads and bridges as well as school repairs, and send $500 to consumers hit by rising energy costs.

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