US unemployment hits highest level in 14 years

07 November 2008 21:34  [Source: ICIS news]

HOUSTON (ICIS news)--The US unemployment rate reached its highest level in 14 years as the economy showed increasing signs of falling into a deep recession, according to data released on Friday.

The unemployment rate reached 6.5% in October, up from 6.1% in September, according to the US Bureau of Labor Statistics.

Non-farm payroll employment fell by 240,000 in October, followed by declines of 284,000 in September and 127,000 in August.

Overall, US employment has dropped by 1.2m during the first 10 months of the year, with half of the decrease occurring in the past three months, the bureau said.

The rising unemployment rate is the latest in a string of bad news about the US economy.

The Institute for Supply Management (ISM) said its closely watched purchasing managers index (PMI) slid to 38.9% for October, down by 4.6 points from September’s PMI of 43.5%.

The October PMI of 38.9% is the lowest reading in 26 years, the institute said. The nearest previous low for the index was the 38.8% recorded in September 1982.

The US automobile industry near a state of collapse following months of year-over-year sales declines, industry sources said.

Such weak economic indicators led the American Chemistry Council (ACC) to give both the US economy and its chemical industry the group's lowest ranking.

"The recession is spreading across the globe," the ACC said in a weekly economic report. "Looking ahead, the indicators will become more negative, a vicious cycle."

Consumers will cut spending, causing sales to fall, inventories to rise and production to drop, the ACC said.

"Things will get worse before they get better," it warned.

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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By: Al Greenwood
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