INSTANT VIEW: Unemployment at 10.2 percent in October

NEW YORK (Reuters) - The household unemployment rate rose to 10.2 percent, highest in 26-1/2 years, as employers shed 190,000 in nonfarm payrolls in October, the Labor Department said on Friday.

KEY POINTS: * The Labor Department said the unemployment rate was the highest since April 1983. * Analysts polled by Reuters had expected payrolls to drop by 175,000 and the jobless rate to edge up to 9.9 percent from 9.8 percent in September.

* The labor market is being watched for signs whether the economic recovery that started in the third quarter can be sustained without government support. The economy grew at a 3.5 percent annualized rate in the July-September period, probably ending the most painful U.S. recession in 70 years.

* Payrolls have declined for 22 consecutive months now, throwing 7.3 million people out of work since December 2007, when the recession started.

COMMENTS:

ANNA PIRETTI, SENIOR ECONOMIST, BNP PARIBAS, NEW YORK

"It's pretty much in line with our expectations. I think it really doesn't change the trend. We have seen an improvement overall in the pace of job losses. What's different is that this improvement is coming at a slower pace than perhaps the market was expecting.

"But there's still a lot of fragility and negative signs in this report. If you look at the household employment, that was showing large job losses. What's worrying is that a couple of months ago the survey was really in line with payrolls, both were showing an improvement in the pace of job losses. But over the past few months, it's actually been surprising on the downside, and showing a bit of a reversal.

"The large decline in the household employment was also responsible for the large increase we saw in the unemployment rate, and that was negative... so clearly a lot of deterioration there.

"Another thing that surprised me was hours worked, that was unchanged... That's worrying, although we have had an improvement in productivity, firms are not increasing their hours. But until we have increasing hours we are not any seeing benefits for the consumer."

DAVID ADER, HEAD OF GOVERNMENT BOND STRATEGY, CRT CAPITAL

GROUP, STAMFORD, CONNECTICUT:

"There is little encouraging in this report and undoubtedly the move to 10.2 percent for the unemployment rate will be the thing that captures most attention. The average hourly earnings gain was okay, less so on a year-over-year basis. In short, this report should add to economic worries about the fourth quarter, even if the nominal job losses were merely as expected and the month-over-month losses are slowing."

PETER CARDILLO, CHIEF MARKET ECONOMIST, AVALON PARTNERS, NEW YORK:

"Obviously it was a little bit disappointing, the highest rate in 26 years, but the trend is that the economy is losing less jobs is still in place, and that's the bright spot. But it is a little bit disappointing that we went above the 10 percent line.

"It strengthened the hands of the Fed, obviously, they did speak about the low rates of resource utilization... the numbers strengthen their hands.