U.S. Unemployment Climbs to 10.2 Percent
The United States unemployment rate surpassed the 10 percent mark for the first time in 26 years this October, reaffirming concerns over a jobless recovery and highlighting a growing disconnect between a recovery in economic output and continued job losses.

According to the latest monthly employment data from the U.S. Department of Labor, released on Friday, the unemployment rate climbed from 9.8 percent in September to 10.2 percent in October, reaching the highest rate since April 1983. Non-farm payrolls declined by 190,000 jobs for the month, with the largest losses in the construction, manufacturing and retail trade sectors.

These troubling figures come on the heels of more positive data: The overall rate of job losses is declining. As U.S. weekly jobless claims for the week ended Oct. 31 fell to a seasonally adjusted 512,000, a drop of 20,000 claims and the lowest level since January, according to the Labor Department. The New York Times notes that the economy lost an average of 645,000 jobs per month between November 2008 and April 2009, while the average for the last three months has fallen to 188,000.

"People are hurting, but if you can get past the sticker shock of the unemployment rate and look at the guts of the report, they are still very consistent with a recovery. We're getting very close to the peak unemployment rate," Michael T. Darda, chief economist at financial research firm MKM Partners, told the Times.

The monthly unemployment rate was announced on the same day that President Barack Obama signed legislation extending unemployment benefits for an additional 14 weeks nationwide, as well as six weeks on top of that in states suffering from especially high unemployment.

U.S. Productivity Skyrockets in Third Quarter
U.S. labor productivity in the non-farm business sector grew at a 9.5 percent annual rate through the third quarter of 2009, the largest gain in productivity since it rose 9.7 percent in Q3 2003, the Bureau of Labor Statistics reported last week. Output increased by 4 percent and hours worked decreased by 5 percent at a seasonally adjusted rate.

The largest gains were in the manufacturing sector, in which third-quarter productivity rose by 13.6 percent, with output increasing by 7.7 percent and hours worked falling by 5.2 percent. This was the largest quarterly gain in manufacturing productivity since 1987. Unit labor costs, which measure the cost of the labor needed to produce one unit of output, fell at a 7.1 percent annual rate.

When combined with the second-quarter non-farm business productivity increase of 6.9 percent, the U.S. had its strongest productivity growth rate over a six-month period since 1961, the Wall Street Journal reports (subscription required). As companies continue to cut costs while revenue recovers, employers are able to generate more output from the existing workforce.

"Big productivity gains are common at the end of recessions and the beginning of recoveries. The usual pattern is productivity grows first, then employment rises, and finally wages increase," the Journal notes.

However, concerns about the downside of higher productivity remain. "Speedups are rarely good for worker morale," BusinessWeek notes. In addition, "productivity that's achieved through slashing hours is a negative for the overall economy. Workers who are laid off or given reduced hours can't afford to spend as much money, so demand for consumer goods remains soft."

U.S. Automakers Show New Resolve
The annualized sales pace among U.S. automakers accelerated in October.

Ford Motor Co. announced last week that sales had grown by 3.3 percent over the same month last year. Ford's October sales were up 21 percent over the previous month, with new car purchases rising to 136,920.

General Motors Co. said it increased total sales by 4.7 percent, the Wall Street Journal reports (subscription required). GM led sales among American carmakers, with 176,632 units sold in October, according to Autodata Corp.

Gains for both GM and Ford were driven largely by significant increases in light truck sales.

Thanks to the increases, Ford's U.S. retail market share rose to 14 percent in October, its highest level in three years — though it remains far from the peak market share of 22 percent in 1995 — Dow Jones Newswires reports (via CNN Money).

Outside the U.S. market, GM's auto sales in China doubled in October over the same month last year, continuing a series of monthly sales records since the start of 2009, Reuters reports.

Meanwhile, Agence France-Presse reports that Chrysler Group registered a 6 percent increase in sales from September to October, selling 65,803 units in the U.S. in October. This represents a 30 percent year-over-year decline.

Chrysler recently unveiled a five-year plan aimed at reaching long-term profitability for the company following its bankruptcy and the sale of a controlling share in the firm to Fiat.

Credit Availability Increases for Manufacturing
Credit availability for the manufacturing sector has begun to grow for the first time in over year, according to the latest monthly survey of credit professionals from the National Association of Credit Management (NACM).

The credit managers' index for manufacturing rose 1.2 points in October, reaching 51.2. (An index reading above 50 indicates growth.) This positive indicator brings credit conditions in line with "with other economic data coming from the industrial community as a whole," according to the report.

The data showed that in October: 1) debt payments improved, 2) the amount of credit being extended rose to its highest level in more than 12 months, 3) fewer applications for credit were being rejected and 4) fewer firms were falling into collection or bankruptcy.

"Companies that had been behind in their obligations are catching up in anticipation of further growth and the need to ask for more credit in the future," Chris Kuehl, economic analyst for NACM, said in an announcement of the findings. Kuehl added that "there is more money starting to filter into the system, making credit more accessible than it has been in some time."