US jobless rate rises to nine per cent

The US unemployment rate rose to nine per cent in April, posing a new challenge to the Obama administration even as businesses added more jobs than expected, official data has shown.

The Labour Department reported the jobless rate climbed to nine per cent in April from 8.8 per cent in March and 244,000 non-farm jobs were added to the world’s largest economy.

The rise in the jobless rate also was unexpected. Experts estimated it would hold unchanged from March’s 8.8 per cent after falling for four consecutive months.

Non-farm jobs were up 10.4 per cent from March, and far above the 185,000 jobs most analysts expected.

It was the strongest jobs creation since May 2009, a month before the country’s worst recession in decades ended.

In a sign the economy is gaining traction away from a government-led recovery, the private sector added 268,000 jobs, a multi-year high and sharply better than the 200,000 expected.

With federal, state and local governments cutting payrolls to try to balance budgets, employment in the public sector “continued to trend down,” the department said.

Slower economic growth – only 1.8 per cent in the first quarter – has translated into a disappointment for those unemployed Americans hoping for relief.

Last week Federal Reserve chairman Ben Bernanke said joblessness continues to be a major problem and is a key reason the Fed has kept up its easy-money policy.

He voiced special concern over long-term unemployment, which he said was the worst since just after World War II.

“Currently something like 45 per cent of all the unemployed have been unemployed for six months or longer,” he said.

“And we know the consequences of that can be very distressing because people who are out of work for a long time, their skills tend to atrophy – they lose contacts with the labour market, with other people working, the networks that they have built up.”

The Fed forecast a slow decline in the jobless rate to between 8.4 per cent and 8.7 per cent by the end of the year.