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The surging interest rates were caused in part by the Federal Reserve Board's tight grip on the money supply, a policy designed to bring down inflation. But there is little agreement about other causes. Officials of the Fed blame ballooning budget deficits for kindling more fears about inflation and thus keeping interest rates high. Administration officials complain that the Fed's erratic control of growth in the money supply scared lenders into keeping interest rates high. Whatever the cause, most economists now agree that the unemployment rate will gradually rise into the summer, perhaps hitting 10%, before beginning to dip again. White House officials fervently hope that by fall the rate, no matter how high, is headed in the right directiondown.
High unemployment is not unique to the U.S. It is afflicting other Western industrial democracies as well. (Although Communist bloc nations profess to have no unemployment whatsoever, the severe troubles afflicting their economies belie that ideological stance.) In Canada the jobless rate is 8.6%, up from 7.4% the year before. In the ten nations of the European community, the unemployment rate stands at a postwar high of 9%, leaving more than 10 million unemployed. In France the rate is 8.7% (up from 7.5% in December 1980), in Italy 9.1% (up from 8.3%). In West Germany the figure is 7.3%, the highest since 1956. After the announcement last week that the unemployment rate for Britain and Northern Ireland had reached 12.7%which meant a record 3 million out of workPrime Minister Margaret Thatcher was greeted in the House of Commons with opposition cries of "Resign! Resign!"
Joblessness in the U.S. takes on many faces and breaks into many patterns, and some of the trends displayed in December's statistics are especially disturbing. Unemployment among blacks is a record 17.4%. The rate for teen-agers was 21.7% (for nonwhite teenagers the figure is a shocking 39.6%). "Discouraged workers," who have not looked for work in the previous four weeks and thus are not included in the monthly unemployment totals, reached a post-war high of 1.2 million during the last three months of 1981, up from 1.05 million the year before. And the number of people working part time, because their hours were cut below 35 a week or because they were unable to find full-time work, grew to a record 5.4 million, up 360,000 in a single month. The unemployment rate for adult men jumped to 8%, a post-World War II high, from November's 7.2%. Economists consider this figure quite significant, since it indicates a growing number of layoffs among the traditional family breadwinners. The unemployment rate for adult women was lower than for men (7.5%), but the rate of joblessness among women with families to support was also a postwar record 10.7% during the last three months of 1981. And while the burden of joblessness still falls most heavily on blue-collar workers, it is spreading into the ranks of white-collar employees: from December 1980 to December 1981, white-collar unemployment rose from 4% to 4.6%.