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Economy begs priority from Obama

Stock market logs worst two-day drop in 21 years

By Jon Ward and Christina Bellantoni | Friday, November 7, 2008

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CHICAGO | A terrible employment report for October highlighted the urgency of President-elect Barack Obama's meeting Friday with his economic advisers.

The Labor Department reported Friday morning that the unemployment rate for October was 6.5 percent, its highest level in 14 years. The jobless rate jumped from 6.1 percent in September.

The department also reported that October payrolls shrank by 240,000 jobs. In its revisions for August and September, the department reported that an additional 179,000 jobs had been lost. Altogether, the U.S. economy has lost nearly 1.2 million jobs during the first 10 months of this year. The private sector has lost 1.34 million jobs so far in 2008.

After meeting with his Transition Economic Advisory Board, Mr. Obama will hold his first post-election news conference at 2:30 p.m. EST.

Those attending the meeting include Vice President-elect Joe Biden; Robert Rubin and Lawrence Summers, both of whom served as Treasury secretary in the Clinton administration; former Federal Reserve Chairman Paul Volcker; Robert Reich, secretary of Labor in the Clinton administration; Laura Tyson, President Clinton's first chairman of the White House Council of Economic Advisers; billionaire investor Warren Buffett, who will participate by telephone; William Donaldson, former chairman of the Securities and Exchange Commission; Richard Parsons, chairman of Time Warner; Eric Schmidt, chairman and CEO of Google; Roger Ferguson, former vice chairman of the Federal Reserve; Jennifer Granholm, governor of Michigan; and William Daley, secretary of Commerce in the Clinton administration.

Mr. Obama, who spent part of Thursday being briefed by President Bush's top intelligence officer and talking with nine world leaders, will hold a meeting with his transition team of 17 economic advisers, including billionaire investor Warren Buffett, and then publicly tackle bad financial news that has returned with a vengeance since his election Tuesday.

On Thursday, reports of the worst month for retailers in 35 years triggered a 443-point plunge in the Dow Jones Industrial Average that added to a nearly 500-point loss Wednesday to complete the worst two days for the Dow since 1987.

Retailers reported a "simply awful" month for sales in October and forecast a dismal 1 percent growth rate for the critical holiday season, during which most stores normally make about a quarter of their yearly sales.

Mr. Obama's schedule was announced as he locked down his first major White House staff position when Rep. Rahm Emanuel, an Illinois Democrat and former senior adviser to President Clinton, agreed to become his chief of staff, and Mr. Bush vowed to help his successor navigate the transition of power.

In an emotional South Lawn address to executive branch employees, Mr. Bush warned that terrorists "would like nothing more than to exploit this period of change to harm the American people" and pledged that he, his Cabinet and executive branch employees would do all it could for the incoming administration.