World economic crisis

Eight per cent unemployment in US, 12.5m people without work

Article published on the 2009-03-06 Latest update 2009-03-06 17:01 TU

An unemployed American wipes away a tear at the Manhattan branch of the New York State Department of Labor
(Photo: Reuters)

Unemployment in the US has reached 8.1 per cent with a total of 12.5 million people without jobs in the world’s largest economy. It could reach 10 per cent before economic conditions improve, as government estimates show a 6 per cent contraction in GDP in the last quarter of 2008.

Figures released by the Labor Department on Friday, demonstrate job losses in December as the worst in the US since October 1949, with 681,000 people losing their employment.

The jobless rate hit 7.6 per cent in January, and some believe it could hit 10 per cent before conditions improve.

Over the last year nearly five million people have lost their jobs in the country, and there are now nearly three million Americans who have been unemployed for six months or more.

To tackle rising unemployment the Labor Department has said they will provide more than 2.7 billion euros for education, training and re-employment services.

Jobs were cut in the majority of sectors, although the government, education and healthcare sectors all added jobs. With the healthcare sector adding around 27,000 jobs.

Some of the biggest job losses include:

• Goodyear (tire manufacturing): 5,000
• Macy’s (retail): 7,000
• General Motors (car manufacturing): 3,400
• Estee Lauder (cosmetics): 2,000
• Lincoln Electric (industrial equipment): 900

 

In recent government estimates, US GDP (Gross Domestic Product) contracted by more than six per cent in the last quarter of 2008.