US joblessness rises above 10%

London: Government figures released yesterday showed US employers cut a deeper-than-expected 190,000 jobs in October, sending the unemployment rate to 10.2 per cent, its highest since April 1983.

Analysts predicted a cut of 175,000 jobs, the smallest number for 14 months, and a rise in the overall jobless rate to 9.9 per cent.

A jump in US unemployment reflects the typical lag shown by the labour market as growth picks up, a top economic adviser to President Barack Obama said yesterday.

"Today's employment report contained both signs of hope for recovery and painful evidence of continued labour market weakness," Christina Romer, chairwoman of the White House Council of Economic Advisors, said in a statement.

There is a widespread anticipation that the labour market will take a while to recover, and Romer said that the dislocation between economic activity and the labour market was usual in an upturn.

"That this [jobless increase to 10.2 per cent] occurred despite the rise in real GDP last quarter reflects both the typical lag between GDP growth and unemployment decline, and the recent exceptional increases in productivity," Romer said.

Oil prices fell by more than 2 per cent after the weaker-than-expected numbers emerged to shake financial markets.

US crude for December delivery was down $1.86 to $77.86 a barrel by 1420 GMT, retracing early gains as high as $80.34 in the trading session. London Brent crude fell $1.70 to $76.29.

The bearish figures crossed a psychological threshold of 10 per cent for markets. "There was a lot of talk early in the market that the number would come in lower, but really we're just kicking the can down the road here, and today's numbers have set risk markets on edge," said David Morrison, market strategist at GFT GLobal.