WASHINGTON (AFX) - Total nonfarm payroll employment fell 415,000 in October from September, the Labor Department said. This is the largest drop in nonfarm payrolls since May 1980. Since a peak in March, there have been nearly 900,000 jobs lost, Labor said. The unemployment rate rose in October to 5.4 pct from 4.9 pct in September. This is the highest unemployment rate since Dec 1996, and the largest one-month jump in the unemployment rate since May 1980. The October nonfarm payroll report was weaker than expected. The consensus forecast of Wall Street economists was for total non-farm payrolls to fall by 286,000, and for the unemployment rate to rise to 5.2 pct. In September, total nonfarm payrolls fell a revised 213,000, more than the initial estimate of a fall of 199,000. Hourly earnings rose 0.1 pct in October. The Wall Street consensus forecast was for a rise in hourly earnings of 0.2 pct. Year-on-year, hourly earning were up 4.1 pct. Every major sector of employment, except government, showed a decline in October. Katharine Abraham, Commissioner of the Bureau of Labor Statistics, said the October report includes the impact of the Sept 11 attack but said it "cannot be separated from other influences on the job market." "Weak labor market conditions were pervasive, but increases in jobless rates were particularly severe for blue-collar workers," Abraham said. Manufacturing jobs fell 142,000 in October after falling a revised 90,000 in September. Since March, employment in the factory sector has fallen by more than 800,000. Services-producing sector jobs fell 241,000 in October. Only once has there been such a steep drop in service employment and that was during an AT&T Corp strike in Aug 1983, a department official said. This is the fourth and largest decline this year, in an industry that had only one monthly decline since May 1991. "Particularly large job losses occurred in the help-supply industry and in hotels," Abraham said. Payrolls for the goods-producing sector dropped 174,000 jobs. Retail jobs declined 81,000 in the month. Construction jobs declined 30,000 in October, while government jobs rose 24,000. In a separate household survey, Labor said the number of unemployed persons rose by 732,000 to 7.74 mln in October. The civilian labor force rose by 113,000 to 142.3 mln, while total employment fell 619,000 to 134.56 mln. The index of aggregate hours worked fell 0.7 pct in October to 148.8 hours. The factory workweek declined by 12 minutes to 40.4 hours. Overtime in the manufacturing sector fell by 6 minutes to 3.8 hours. The average workweek fell by 6 minutes to 34.0 hours. Average weekly earnings fell 0.2 pct to 491.98 usd, and were up 2.9 pct year-on-year.