Vanishing Act: Unemployment Rate Hits Five-Year High in October

The jobs report also reveals the biggest monthly decline in payrolls in 21 years.
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The U.S. economy lost more jobs in October than during any month in the last two decades as the terrorist attacks exacerbated an already grim employment picture.

The Labor Department said nonfarm payrolls fell by 415,000 in October, lifting the unemployment rate to 5.4%, its highest level in five years. The rate had stood at 4.9% at the end of September. The payroll decline was the biggest monthly loss of jobs since May 1980.

Both numbers were worse than expected and should give the Fed more reason to cut interest rates by another half-percentage point when its policymaking arm meets next week. The report follows similarly weak data from the manufacturing sector Thursday, although the bad news hasn't taken a corresponding toll on the stock markets in recent days.

Jobs evaporated throughout the economy in October, with the service sector shedding 241,000 jobs, its biggest loss in 18 years. Manufacturers cut 142,000 jobs, bringing their total to more than 850,000 over the last eight months.

Wage growth was also tamer than expected, with average hourly pay rising 2 cents to $14.47, while the length of the average work week fell marginally.