US jobless rate rises to 6.5 percent

November 7th, 2008 - 11:22 pm ICT by IANS  

Washington, Nov 7 (DPA) Unemployment in the United States rose to 6.5 percent in October, after remaining steady for two months at 6.1 percent, the US Labor Department reported Friday.The figure meant that another 603,000 people were out of work, and represented the loss of 240,000 non-farm jobs.

Over the past 12 months, the number of US unemployed has increased by 2.8 million and the unemployment rate has risen by 1.7 percentage points, in another sign of continuing economic decline.

The total number of unemployed in US now stands at 10.1 million, the bureau said.

Last week, the government said the US economy contracted by 0.3 percent in the third quarter of 2008, the sharpest decline in seven years amid the global financial crisis that has blocked credit access and severely depressed consumer spending.

Although the formal definition of a recession is two straight quarters of negative growth, analysts have been saying for more than a month that the recession is already here.

Thursday, the International Monetary Fund (IMF) drastically cut its global economic forecasts and predicted a recession in the United States and the world in 2009.

In an update of its World Economic Outlook from October, the IMF said global growth would slow to 2.2 percent in 2009, down from the 3-per-cent forecast made last month and from 3.7 percent expected this year. Growth of under 3 percent is rated by the IMF as a global recession.

Heads of state from 20 countries are to meet Nov 15 in Washington at an emergency summit to chart the way forward out of the crisis in the finance industry. World credit lines have been blocked by foreclosures on 3 million mortgages in the US as an inflated housing bubble burst.

Banks and financial firms had invested heavily in securitized packaging of the mortgages, which were increasingly sold to buyers with questionable credit ratings as the housing market heated up.

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