US unemployment jumps to 9.6%

WASHINGTON : US unemployment jumped to 9.6 per cent in August, the Labor Department said on Friday, showing the recovering economy is still struggling to create jobs.


In a keenly awaited unemployment report, the department said the economy lost 54,000 jobs last month, a better figure than the 120,000 loss expected by economists.

The figures are seen as a crucial litmus test for the sputtering economic recovery and President Barack Obama's policies.

Economists had predicted the unemployment rate would rise to 9.6 per cent, one tenth of a percentage point above July levels, although much better than the 10.1 per cent posted in October.

The news was seen by Wall Street as moderately good news, but will throw up challenges for the White House and the Federal Reserve as they struggle to help the jobs market to its feet.

The White House has ruled out an "extraordinary" new economic stimulus plan to fire up the slowing recovery, but has said that Obama is scouting new ideas to boost jobs and growth.

Obama is expected to address the latest jobs figures later in the day, as he begins a heavy slate of economy-themed events, including travel to the hard-hit Midwest to highlight his economic recovery plans and the hosting of a major press conference next Friday.

But with many lawmakers fretting ahead of November's mid-term elections and public concern mounting over the forecast 1.4-trillion-dollar budget deficit, Obama's leeway is limited.

One bright spot in the August jobs report was the private sector's ability to create a much better than expected 67,000 jobs, although that was not enough to offset the government releasing around 114,00 temporary census workers. - AFP/al/ms