Unemployment Hits 26-Year High

The US jobless rate hit 8.9% in April the Bureau of Labor Statistics said this morning, as the economy continued to shed jobs across nearly all major private-sector industries, raising fears of rising foreclosures as homeowners struggle with the drop in income. Nonfarm payrolls fell 539,000 in April, the smallest decline recorded in six months, a result of the government’s temporary hiring in advance of next year’s census. The data suggests that while labor markets show some signs of recovery, “the improvement may be more gradual than hoped,” Zach Pandl, economist at Nomura, told the Wall Street Journal. During April, the manufacturing industry was hit hardest, dropping 149,000 jobs, while construction employment declined by 110,000. The business services industry lost 122,000 jobs and employment in retail trade fell 47,000. The Health care industry proved an exception to the trend, increasing employment by 17,000, fairly consistent with the trend of its hiring volume so far in 2009. The total number of jobs lost since the recession began in December 2007 now sits at 5.7m. The data is especially worrying as unemployment is not longer limited to certain areas. States once believed to be isolated from the downturn, such as Idaho, Illinois and Oregon, are now reporting higher rates of unemployment than expected, decreasing housing prices and rising defaults on mortgages as a result. The number of long-term unemployed — those jobless for 27 weeks or more — increased by 498,000 to 3.7 million over the month and has risen by 2.4 million since the start of the recession in December 2007. Many economists predict unemployment will eventually mount 10%, before beginning to make a recovery. The Blue Chip Economic Indicators survey released in April shows 86% of the private economists surveyed believe rising unemployment will last well into 2010. Write to Kelly Curran.