Unemployment rate rises to 9.8%, 26-year high By Rex Nutting, MarketWatch WASHINGTON (MarketWatch) - The U.S. labor market weakened in September as 263,000 payroll jobs were lost and the unemployment rate rose a tenth to a 26-year high of 9.8%, the Labor Department reported. It was the 21st consecutive month of job losses. Since the recession began in December 2007, 7.2 million jobs have been lost and the unemployment rate has doubled. Details of the report were almost universally dismal, with the number of unemployed people rising by 214,000 to 15.1 million. Of those, 5.4 million have been out of work longer than six months, accounting for a record 35.6% of the jobless. The employment participation rate fell to 65.2%. An alternative gauge of unemployment, which includes discouraged workers and those forced to work part-time, rose to 17% from 16.8%. Total hours worked in the economy fell by 0.5%. The average workweek fell back to an all-time low of 33 hours. Average hourly earnings rose just 1 cent, or 0.1%, to $18.67. Average hourly earnings are up 2.5% in the past year. Economists surveyed by MarketWatch expected a smaller payroll loss of 167,000. They expected the unemployment rate to rise to 9.8%. In August, payrolls fell by a revised 201,000, and the unemployment rate was 9.7%. Payroll losses in July and August were revised lower by 13,000. The government announced that it would likely lower total employment by about 824,000, or 0.6%, in its annual benchmark revision in January. The revision, based on tax records, is about three times the normal revision of 0.2%. The large error came in early 2009, when large numbers of businesses were failing. If the benchmark is close to the preliminary estimate, the job loss since the recession began would rise to about 8 million. In its survey of 400,000 business establishments, the government found that private-sector employment fell by 210,000 to 130.9 million in September. Government employment fell by 53,000. Employment in the goods-producing sector fell by 116,000, including 64,000 in construction and 51,000 in manufacturing. Service-producing jobs fell by 147,000, including 39,000 in retail. The only major sector adding jobs was health care and education, which added just 3,000. Of 271 industries, about 32% were hiring in September, down from 35% in August. In its survey of 60,000 households, the government found that employment fell by 785,000. The unemployment rate for adult men rose to 10.3% and the rate for adult women rose to 7.8%.

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