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9.8 Percent Jobless Rate 'Sobering,' Obama Says

Melvin Winston fills an out application on Sept. 25 for positions at a new bar and restaurant in Detroit.
Paul Sancya
Melvin Winston fills an out application on Sept. 25 for positions at a new bar and restaurant in Detroit.

President Obama said Friday that his administration will do everything possible to put Americans back to work after September job cuts pushed the U.S. unemployment rate to 9.8 percent — the highest in 26 years.

"I want to let every single American know that I will not let up until those who are seeking work can find work," Obama said, calling a new unemployment report a "sobering reminder" of how fragile the economy is.

Earlier Friday, the Labor Department announced that U.S. employers cut 263,000 jobs last month, meaning payrolls have now dropped for 21 consecutive months. Experts had not expected such massive cuts, especially on the heels of a revised report showing 201,000 job losses in August. Last month's unemployment rate was 9.7 percent.


Obama said economic recovery comes "in fits and starts" — and employment is usually the last thing to improve after recession. He promised that his administration will continue to emphasize job creation.

Earlier, Vice President Joe Biden said the Labor Department report is evidence that the administration's economic policies have been a success. The stimulus package that pumped $787 billion into the U.S. economy earlier this year has saved and created 1 million jobs, he said.

"The first quarter of this year, we were losing jobs at an average of 700,000 jobs per month, month after month. In the quarter that ended this week, the loss was 250,000 jobs per month, two-thirds less," Biden said.

The discouraging jobs report demonstrated that the severe economic downturn is continuing to make life difficult for many Americans, despite the belief of many economists that growth is resuming.

Most economists expect the unemployment rate to exceed 10 percent before it begins to drop some time next year. While Friday's news was disappointing, experts said things are improving.


"We're still losing jobs, but we're losing jobs at a slower pace. So the economy is getting less worse, I think, if you measure it strictly by employment," said economist Hugh Johnson, president of Johnson Illington Advisors LLC in Albany, N.Y.

Construction jobs took a huge hit in September, with 64,000 jobs eliminated. Manufacturing shed 51,000 positions, and the service sector cut 147,000 jobs in September.

Government jobs also declined, with 53,000 federal, state and local jobs being cut. Local governments, which have seen decreased tax revenue because of foreclosures, the business downturn and unemployment, cut the most, reducing their payrolls by 24,000 workers.

Health and education — considered to be the bright spots on the jobs horizon — added only 3,000 jobs last month.

Since the recession began, the ranks of the unemployed have swelled from 7.6 million to 15.1 million. But Johnson predicted that would begin to turn around between January and the end of March.

"My number-crunching says that some time in the first quarter employers will no longer be shedding jobs or eliminating jobs from payrolls, they'll start to add jobs, although at a very slow pace," he said.

Meanwhile, the Commerce Department reported that U.S. factory orders fell in August by the largest amount in five months. The report released Friday said demand for manufactured goods dropped 0.8 percent because of the decreased demand for commercial aircraft, which had soared in July.

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