Obama faces highest US jobless rate for 14 years

Not only does President-elect Barack Obama face a deteriorating economy, a housing collapse and rising foreclosures but a further challenge presents itself after figures today from the US Labor Department revealed that 240,000 jobs were lost in October.

The Labor Department said that the jobless rates in the world‘s largest economy increased to a higher than expected 6.5% from 6.1% in September, the worst rate since March 1994.

In September, 284,000 jobs were lost, meaning over half a million jobs were lost in the last two months alone. The job losses in September were the worst since November 2001 in the aftermath of the terrorist attacks in September of that year.

The Labor Department said 1.2 million people in the US have lost their jobs so far this year.

Goldman Sachs believes that the unemployment rate by the end of 2009 will be running at 8.5%. In the 1980-1982 recession, the unemployment rate rose to 10.8%.

Richard Dekaser, economist at National City Corp in Cleveland, Ohio, said the figures reflect serious recession conditions and there will be more of this going forward.

The markets didn’t respond to the news very well with the Dow Jones and the FTSE 100 both falling. Furthermore, the US dollar fell further against the Japanese yen.

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