Oct. 11 (Bloomberg) -- The U.S. unemployment rate may rise above 10 percent as employers cut payrolls further, Federal Reserve Bank of St. Louis President James Bullard said.

“Unemployment is leveling off but we still may be headed toward double digits,” Bullard told reporters today after a speech in St. Louis. The rate was 9.8 percent in September, the highest since 1983.

“Labor markets are very weak,” Bullard said. “It is disturbing, and I find it upsetting that we are still losing jobs. We would like to see nonfarm payrolls turn positive before the end of the year. I don’t know if we will get there or not.”

The economy lost 263,000 jobs in September, more than economists forecast. September’s losses brought total job reductions since the recession began in December 2007 to 7.2 million, the biggest decline since the Great Depression.

To contact the reporter on this story: Steve Matthews in St. Louis at smatthews@bloomberg.net

Last Updated: October 11, 2009 15:34 EDT