U.S. unemployment now over 10% for first time in 26 years

In October U.S. unemployment rose over 10% (to 10.2%) for the first time in 26 years, and only the 2nd time since the 1948 employment record keeping began.  Behind this headline number we examine additional concerning details:

• the rate of unemployment rises to 17.5% when including those who have stopped looking or are working part-time since they can't find full time work
• although unemployment in management and professional occupations is only 5%, the rate in production is about 15% and the rate in construction is about 20%

Although the 3rd quarter U.S. GDP was recently announced at a preliminary estimate of growing at an annual rate of 3.5%, the jobs report shows this growth has yet to reach Main Street America.  Further, some now estimate additional increases in unemployment such as Moody's Economy.com who sees the rate peaking at 11% in mid-2010.

In the meantime, Congress and the White House have been focused solely on healthcare legislation.  Expect this to change in the near future as voters this week sent a signal of dissatisfaction with election of Republican governors in New Jersey and Virginia.  Although the White House claims to have saved or created 640,000 jobs with fiscal stimulus, the math by observers reveals the cost-to-date of each such job to be $92,000.  A jobs credit bill is now being discussed, but the already record-high U.S. budget deficits make any such action challenging for lawmakers.

The big question for the economy and investment markets seems "Will U.S. consumers continue to spend as concerns about unemployment grow amid a diminishing ability of government to do anything about it?"  We shall see.