Unemployment hit 9.8 percent in September

Unemployment rose to 9.8 percent in September and the economy shed another 263,000 jobs, the Labor Department reported Friday.

It’s the highest the unemployment rate has been in more than two decades, and the job losses exceeded expecations. Many economists had thought less than 200,000 jobs woud be lost for the month..

The largest job losses were in construction, manufacturing, retail trade and government, Labor said in its monthly report.

Stocks fell on the news. The Dow Jones Industrial average was down more than 60 points in early trading.

The rate only rose from 9.7 percent in August and the pace of job losses has slowed significantly since earlier this year, something the Obama administration attributes to the $787 billion stimulus package. The White House believes the stimulus is saving hundreds of thousands of jobs that would otherwise be lost.

Republicans have repeatedly criticized the stimulus, saying it has done little if anything to slow job losses.

“The stimulus has clearly failed to reach the administration’s stated goals, and we need to refocus on bipartisan ways to overcome this challenge,” House Minority Whip Eric CantorEric Ivan CantorFeehery: The governing party 'Release the memo' — let's stop pretending that Democrats are the defenders of the FBI Raúl Labrador, a model for Hispanic politicians reaching higher MORE (R-Va.) said in a statement Friday.

President Barack ObamaBarack Hussein ObamaOvernight Energy: Dems ask Pruitt to justify first-class travel | Obama EPA chief says reg rollback won't stand | Ex-adviser expects Trump to eventually rejoin Paris accord Overnight Regulation: Trump to take steps to ban bump stocks | Trump eases rules on insurance sold outside of ObamaCare | FCC to officially rescind net neutrality Thursday | Obama EPA chief: Reg rollback won't stand Ex-US ambassador: Mueller is the one who is tough on Russia MORE is expected to make an announcement on the job figures Friday afternoon from the Rose Garden.

The economy has shown signs of life in recent months, and Federal Reserve Chairman Ben Bernanke earlier this summer suggested the recession is now over.

Still, business is not expected to begin hiring in droves for some time, and the unemployment rate is widely expected to cross the 10 percent threshold later this year.

The unemployment rate has now doubled since the recession began in December 2007, with the number of jobless increasing from 7.6 million to 15.1 million.

More people are also out of work for longer periods of time. The number of people jobless for 27 weeks or more rose by 450,000 in September to reach 5.4 million.

This story was updated at 10:09 a.m.