The unemployment rate in the U.S. soared to a 26-year high of 10.2 percent in October and employers cut more jobs than forecast, underscoring why Federal Reserve policy makers say interest rates will remain near zero.
Payrolls fell by 190,000 workers last month, compared with a 175,000 drop anticipated by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. The jobless rate gained from 9.8 percent in September and exceeded 10 percent for the first time since 1983.
Stocks slid and Treasury notes gained on concern the emerging economic recovery will cool as American consumers retrench. Fed policy makers this week said the economy will probably "remain weak for a time" and reiterated a pledge to keep borrowing costs low for an "extended period."
"We will certainly have very bad payroll numbers in November and December," said Harm Bandholz, an economist at UniCredit Global Research in New York who accurately forecast the size of the drop in payrolls. "We don't foresee businesses going on a hiring spree anytime soon."
The Standard & Poor's 500 Stock Index fell 0.4 percent to 1,062.08 at 9:35 a.m. in New York. Treasuries rose, pushing the yield on the 10-year note down to 3.5 percent from 3.53 percent yesterday.