LEAD: US jobless rate dips to 9 per cent

By Frank Fuhrig Nov 4, 2011, 15:48 GMT

Washington - The US unemployment rate dipped to 9 per cent in October from 9.1 per cent a month earlier, the Labour Department said Friday, amid sluggish growth in the world's biggest economy.

The number of unemployed people remained little changed at 13.9 million. The seasonally adjusted unemployment rate has hovered at 9-9.2 per cent since April.

Economic growth of 1.6 per cent for the last 12 months has so far been too slow to make a significant increase in employment.

The private sector saw job growth in professional and businesses services, leisure and hospitality, health care, mining and retailing, while construction employment fell. Government payrolls shrank, continuing a three-year trend as state and local governments struggle with extremely tight budgets amid the flaccid economy and weak tax revenues.

The rate-setting Federal Reserve forecast Wednesday that the US unemployment rate would remain at 9 per cent for the rest of 2011 and would fall only to 8.6 per cent next year.

The unemployment rate has topped 8 per cent since February 2009, making this the longest period of joblessness at such high levels since the government began keeping monthly records in 1948.

The usually persistent weakness in the job market has led to sharp increases in the number of long-term unemployed, or those without work for more than six months. Loss of skills and personal networks can cause such people to become chronically jobless or even unemployable.

In October, though, the number of long-term unemployed dropped by 366,000 to 5.9 million. The fraction of long-term unemployed among the jobless declined to 42.4 per cent from 44.6 per cent in September.

Payrolls expanded by 80,000 jobs in October, and the Labour Department revised its estimates for the previous two months higher by a combined 102,000.

A survey by Bloomberg News of more than 90 Wall Street economists had found an average forecast for payroll growth of 95,000 for October.

The Labour Department's October report showed an increase in hourly wages and fewer people classified as under-employed. Both could be signs of future hiring, as employers try to maximize output from existing workers before adding new people.

Uncertainty in the economy, including volatile equity markets and the ongoing eurozone debt and banking crises may be leading businesses to postpone hiring.