US unemployment hits 26-year high of 9.8%

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US companies shed 263,000 staff last month, lifting the unemployment rate to 9.8 per cent – the highest since June 1983. More layoffs than expected fuelled fears that a weak labour market could undermine recovery.

The unemployment rate has now risen for 21 consecutive months. Since the start of the recession, the number of people out of work has shot up by 7.6 million to 15.1 million. "We are probably still on track for recovery but it's going to take time to unfold," said Gary Thayer, of Wells Fargo Advisors.

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