Unemployment Rate 10.2%; Markets Head Lower

Sarla Buch
06 Nov, 2009
New York City

October unemployment surged to 10.2%, record since 1983 as builders, factories and services cut staff. Payrolls declined 19,000 in the month and the jobless rate increased from 9.8% in September. European markets turned lower but Asian markets closed higher tracking yesterday

[R]9:15 AM New York – October unemployment surged to 10.2%, record since 1983 as builders, factories and services cut staff. Payrolls declined 19,000 in the month and the jobless rate increased from 9.8% in September. European markets turned lower but Asian markets closed higher tracking yesterday’s gains in New York.[/R]

Stock futures declined in the early trading after the release of October jobless rate.

The European markets were unchanged in the early morning trading but quickly declined after the release of the jobless rate report. Royal Bank of Scotland swung to a net loss after it recorded a write down of £3.3 billion.

Asian markets closed higher tracking yesterday’s gains in New York.

Oil and natural gas futures edged lower and the dollar edged higher in the early trading.

October Unemployment Rate at 10.2%

Unemployment rate in October rose to 10.2%, a 26-year high as industries still cut jobs and economic recovery is patchy and uneven. The average work week was a record low of 33 hours in the month and weekly wages edged to $617.76 from $616.11 in September.

Payrolls in the month declined 190,000 and unemployment rate increased from 9.8% in September. Jobless rate crossed 10% for the first time since 1983 and when counted underemployment and people who have stopped looking for work the private estimate of jobless rate run as high as 16%.

Factories cut 61,000 jobs, builders eliminated 68,000 jobs and service industry lowered employment by 61,000. Financial sector cut 8,000 jobs in the month.

Payrolls at various government branches were unchanged in the month.

Earnings Review

Assicurazioni Generali SpA, the insurer said third quarter net earned premiums rose 8.6% to €15.2 billion from €14 billion a year ago. Net profit in the quarter rose 85.5% to €390.2 million compared to net profit of €210.3 million a year ago.

Cap Gemini SA, the outsourcing, technology and local professional services provider said third quarter sales fell 7% to €1.95 billion from €2.10 billion a year ago and fell 9% on like-for-like basis.

British Airways Plc, said first-half revenues fell 13.7% to £4.1 billion from £4.75 billion a year ago. Net loss for the first-half was £208 million or 18.8 pence per diluted share compared to net loss of £42 million or 4.3 pence per share a year ago.

Magna International Inc., the automotive supplier said third quarter sales fell 15.6% to $4.67 billion from $5.53 billion a year ago. Net income in the quarter was $51 million or 45 cents per diluted share compared to net loss of $215 million or $1.93 per share a year ago.

The Royal Bank of Scotland Group plc, said third quarter total income fell 17.4% to £7.1 billion from £8.6 billion a year ago. Net loss for the quarter was £1.8 billion compared to net profit of £871 million a year ago.

Smith & Nephew plc, the medical device maker said third quarter revenues fell 1.6% to $915 million from $930 million a year ago. Net profit for the quarter rose 73% to $128 million or 14.4 cents per diluted share compared to net profit of $74 million or 8.3 cents per share a year ago.

Toyota Motor Corporation, the carmaker said second quarter revenues fell 24.3% to ¥4.54 trillion from ¥16 trillion a year ago. Net profit for the quarter fell 84% to ¥21.8 billion or ¥6.96 per diluted share compared to net profit of ¥139.8 billion or ¥44.52 per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 71.91 or 0.74% to 9,789.35, and Hang Seng index in Hong Kong increased 350.64 or 1.63% to 21,829.72, and CSI 300 index in China higher 18.70 or 0.54% to 3,483.02. ASX 200 index in Australia increased 86.00 or 1.91% to 4,594.00. The FTSE Bursa KL Composite index in Malaysia was higher 6.80 or 0.54% to 1,260.76.

The Kospi Index in South Korea increased 20.22 or 1.30% to close at 1,572.46. SET index in Thailand closed higher 16.72 or 2.45% to 698.63. JSE Index in Indonesia increased 27.89 or 1.18% to 2,395.11. The Sensex Index in India increased 94.38 or 0.59% to 16,158.28.

Europe Markets Review

In London FTSE 100 Index traded higher 3.13 or 0.06% to 5,128.77, in Paris CAC 40 Index decreased 8.00 or 0.22% to 3,700.73 and in Frankfurt DAX index traded lower 5.77 or 0.11% to 5,475.15. In Zurich trading SMI increased 9.97 or 0.16% to 6,295.17.