The Employment Situation: October 2001 — 2001-11-02

Employment fell sharply in October, and the unemployment rate jumped to 5.4 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Nonfarm payroll employment dropped by 415,000 over the month, by far the largest of three consecutive monthly declines. The job losses in October were spread across most industry groups, with especially large declines in manufacturing and services. The labor market data from the household and payroll surveys for the month of October are the first data from these surveys to reflect broadly the impact of the terrorist attacks of September 11. The labor market had been weakening before the attacks, and those events clearly exacerbated this weakness. It is not possible, however, to quantify the job-market effects of the terrorist attacks. The number of unemployed persons increased by 732,000 to 7.7 million in October. The unemployment rate rose by 0.5 percentage point to 5.4 percent, seasonally adjusted, the highest level since December 1996.