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To: Jon Khymn who wrote (163)	11/2/2001 9:37:41 PM
From: Jon Khymn	Read Replies (1) \| Respond to of 795

Friday November 2 5:43 PM ET October Job Losses Worst in Two Decades By Glenn Somerville WASHINGTON (Reuters) - The United States shed a staggering 415,000 jobs in October, the most in two decades, as the full impact of the Sept. 11 attacks ripped into an economy that is probably already in the early stages of recession, a government report on Friday showed. The Labor Department (news - web sites) said job losses last month were the worst since 464,000 were axed in May 1980. They came on top of 213,000 cast away in September and 54,000 in August -- showing a job market that was soft before the attacks and that has crumbled since. The unemployment rate shot up half a percentage point to 5.4 percent in October from 4.9 percent in September -- the highest in nearly five years, since a matching 5.4 percent rate in December 1996. Analysts were hard-pressed to find bright spots in the report, as virtually every sector of the economy lost jobs. Many businesses shut down for a few days after hijackers slammed airplanes into the World Trade Center and the Pentagon (news - web sites) and shoppers abandoned malls. Some industries like airlines and tourism are still trying to crawl back to normal operation amid heightened economic uncertainty and consumer anxiety. IN RECESSION'S GRIP NOW ``We clearly are now in the throes of a nasty recession,'' said economist Bill Cheney of John Hancock Financial Services Inc. in Boston. ``Nothing dampens consumer confidence and spending like job losses, even if you aren't the one losing your job.'' President Bush (news - web sites) said shortly after the data came out that there was rising urgency for lawmakers to approve broad-based measures to boost activity. A package is currently working its way through Congress, but progress has been slow amid partisan bickering. ``We need to work together to prevent further loss of jobs by passing an economic stimulus package that in fact will cause the job base to firm up and expand,'' Bush said. The worse-than-expected report raised concerns that a more severe downturn might lie ahead and boosted chances for another sharp interest rate cut by the Federal Reserve (news - web sites) next week. A Reuters poll of the 24 primary dealers in U.S. government securities -- the biggest Wall Street firms that deal directly with the government -- found that 15 now expect U.S. central bank policymakers to slash the 2.5 percent federal funds rate on overnight bank lending to 2 percent next Tuesday. The remaining nine foresee a smaller quarter-percentage-point cut. ``The recession is getting deeper and will extend well into 2002,'' said economist Sung Won Sohn of Wells Fargo Bank in Minneapolis, but he added there could be a strong rebound in the second half next year because of fresh stimulus spending, reduced tax rates and sharply lower inventories. ``But meantime, government policymakers must put out the immediate fire in front of us in the form of a rising jobless rate and plunging confidence,'' Sohn said, ``That's why the Fed has to cut interest rates another half percentage point next week.'' The U.S. central bank's policy-setting Federal Open Market Committee (news - web sites) meets on Tuesday. It already has cut rates nine times this year, but the economy was losing steam even before the Sept. 11 attacks, which are widely regarded as having been the straw that broke the record economic expansion's back. EXPANSION HAS ENDED Earlier this week, the government reported the nation's gross domestic product, the broadest measure of total economic activity, shrank at a 0.4 percent rate in the third quarter. White House Economic Adviser Glenn Hubbard told reporters that the likelihood was ``quite high'' that fourth-quarter GDP (news - web sites) also would contract. If so, that would fulfill the official definition of a recession, in which national output shrinks for at least six months. Financial markets were unbowed in the face of the bleak economic data as investors apparently looked past current conditions toward a recovery sometime next year. The Dow Jones Industrial average added a modest 59.64 points, less than one percent, to close at 9,323.54, while the high tech-laden Nasdaq composite index was down less than one percent to end at 1,745. The dollar was stable, apparently on the belief that other parts of the global economy may encounter a steeper recession and have more difficulty putting stimulative policies into place than the United States. The job losses were broad-based in October. Goods-producing companies cut 174,000 people from payrolls, nearly twice the 90,000 who were cut in September. But service-producing companies engaged in everything from transportation to retail trade chopped a whopping 241,000 people, double the 123,000 who were shed in September. Despite the spike in the October unemployment rate to 5.4 percent, Sohn noted that this was only half the nearly 11 percent rate hit during the 1981-82 recession -- the steepest downturn in the post-World War Two period. Nor does the rate approach European unemployment levels. In September, 9.1 percent of the French work force was unemployed and 9 percent of Germans were out of work. In addition, it was well below the Canadian rate of 7.3 percent last month, reported by the Canadian government on Friday, demonstrating the U.S. economy's durability after a record period of expansion during the 1990s when hundreds of thousands of jobs were created.