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US unemployment expected to soar US unemployed rate jumps to 8.1%
(about 3 hours later)
Payroll figures due out later on Friday are expected to show that it was an unusually tough month for US workers. The US jobless rate jumped in February to 8.1%, according to official figures from the Labor Department.
Figures from the Labor Department are predicted to show that employers cut a net total of 650,000 jobs in the month, up from 598,000 in January. The number of people out of work rose by 651,000 during the month. Both figures were bigger than expected.
That figure would be the biggest monthly rise in unemployment since October 1949, although the workforce has grown significantly since then. The number of job cuts in January was revised up to 655,000 while December's losses were pushed up to 681,000.
The jobless rate is expected to rise to 7.9% from 7.6% in January. December's figure was the biggest job loss in a single month since October 1949. The unemployment rate was the highest since December 1983.
A jobless rate of 7.9% would be the highest since the rate of 8% recorded in January 1984. Rising unemployment has meant greater demand for free meals
FEBRUARY'S BIG CUTS Goodyear: 5,000Macy's: 7,000General Motors: 3,400Estee Lauder: 2,000Lincoln Electric: 900 Jobs were cut in most sectors, with only government, education and health services adding staff.
The figures follow Thursday's data, which showed that initial jobless claims fell in the week ending 28 February to 639,000 from the previous week's level of 670,000. In the manufacturing sector 168,000 jobs were cut in the month while 104,000 jobs went in construction and 375,000 were cut in the service sector.
"Despite this decline, which is good news, initial claims remained at a very high level at the end of February, suggesting that the period of strong layoffs is not over," said Marie-Pierre Ripert at Natixis. "The payroll numbers are very weak. With the revisions, we've had significant job losses in the past four months," said Gary Thayer, senior economist at Wachovia Securities in St Louis.
The perception that the payrolls figure is likely to show a big fall was strengthened by the Federal Reserve's Beige Book, released on Wednesday, which said that economic activity had "deteriorated further" in February. "Companies are reducing workers and output in order to bring inventories into line with weak sales."