Washington: US President Barack Obama said on Tuesday that unemployment was expected to hit 10% this year as companies cut payrolls to cope with prolonged recession.
Asked during an interview with the Bloomberg television network whether the jobless rate, which surged to a 26-year high of 9.4% in May, would reach 10%, the president said:“Yes.”
Queried whether the double-digit rate would occur this year, Obama also replied in the affirmative but added that jobs would continue to be lost even as the recession that struck in December 2007 eased.
“Yes. I think that what you’ve seen is that the pace of job loss has slowed, and I think that the economy is going to turn around.
“But as you know, jobs are a lagging indicator. And we’ve got to produce 150,000 jobs every month just to keep pace, just to flatten this out.”
The latest Labour Department’s monthly report, seen as one of the best indicators of economic momentum, offered conflicting signals about a weak labour market, but suggested that the pace of massive job cuts appeared to be easing.
Some 345,000 nonfarm jobs were shed in May - much lower than the 520,000 expected and about half the monthly decline of the past six months.
But the unemployment rate, based on a separate survey of households, rose sharply from 8.9% to a worse-than-expected 9.4%, the highest level since August 1983.
Some said the labor report, along with revised jobless figures for March and April, showed the recession-ravaged economy may have hit bottom, consistent with the notion of “green shoots” of recovery cited by Federal Reserve chairman Ben Bernanke.