U.S. Unemployment Soars

The nation's unemployment rate bolted to a 14-year high of 6.5 percent in October as another 240,000 jobs were cut, the government said Friday. It was stark proof the economy is almost certainly in a recession.

The new snapshot, released by the Labor Department, shows the crucial jobs market deteriorating at an alarmingly rapid pace.

The jobless rate zoomed to 6.5 percent in October from 6.1 percent in September, matching the rate in March 1994. Employers have cut jobs each month this year.

Unemployment has now surpassed the high seen after the last recession in 2001. The jobless rate peaked at 6.3 percent in June 2003.

Employers got rid of 240,000 jobs in October, marking the 10th straight month of payroll reductions.

The government also reported that job losses in August and September turned out to be much deeper. Employers cut 127,000 positions in August, compared with 73,000 previously reported. A whopping 284,000 jobs were axed last month, compared with the 159,000 jobs first reported.

So far this year, a staggering 1.2 million jobs have disappeared.

The employment market is much weaker than economists expected. They were forecasting the unemployment rate to climb to 6.3 percent in October and for payrolls to fall by around 200,000.

Job losses were widespread. Factories cut 90,000 jobs, construction companies got rid of 49,000 jobs, retailers cut payrolls by 38,000, professional and business services reduced employment by 45,000, financial activities cut 24,000 jobs, and leisure and hospitality axed 16,000 positions.

Economists say the worst is yet to come.

David Wyss, an economist with Standard & Poors, told CBS News correspondent Anthony Mason, "Well, I think we're gonna see this kind of number through the middle of next year."

Wyss expects the unemployment rate will continue to rise until the end of next year.

"We're now looking for a peak up over 8 percent," Wyss told Mason.

In a related development, Ford plans to cut about 2,260 more jobs, the latest in a vicious cycle of vanishing jobs and stresses on American consumers that is spelling deeper trouble for the already sinking U.S. economy.

In reporting Friday that it lost $129 million in the third quarter and went through $7.7 billion in cash, Ford Motor Co. said it will cut another 10 percent of its North American salaried work force costs as it tries to weather the worst economic downturn in decades.

Keeping One's Head Above Water

Fifty-two-year-old Jaclyn Hirsty lost her job with a swimwear company 15 months ago.

"The company I worked for packed up and moved back to Italy and laid everybody off," she told Mason. She has been living off her savings ever since.

"As my savings have just sunk it's been getting harder and harder," Hirsty said.

Hirsty swims to relieve the stress. She's a world-record holder in her age group - who's now struggling to keep her head above water.

"I don't know what the answer is or what it will take to put people like me back to work, but something has to happen," she said.

Hirsty lives in Rhode Island, which now has the nation's highest unemployment rate: 8.8%. The state job center in Providence has had to put in more phone lines to meet surging demand.

And traffic at the food pantry at the Jonnycake Center of Peace Dale, R.I., has tripled this year.

"We have seen lots of folks who have lost their jobs, been laid off, that are coming to us now because they have no place to turn," said Susan Gustaitis of the Jonnycake Center.

But with Americans increasingly worried about losing their jobs and their retirement savings, many are spending less … and less spending only leads to more job cuts. That's why many economists are saying another stimulus package is needed ... in a hurry.