WASHINGTON — The unemployment rate rose to 9.8 percent in September, the highest since June 1983, as employers cut far more jobs than expected.

The report shows that the worst recession since the 1930s is still inflicting widespread pain and underscores one of the biggest threats to the nascent economic recovery: that consumers, worried about job losses and stagnant wages, will restrain spending. Consumer spending accounts for about 70 percent of the nation's economy.

Meanwhile, a surprise drop in factory orders extended the recent string of disappointing economic readings. The Commerce Department said factory orders fell 0.8 percent in August following a 1.4 percent gain in July. Analysts had been expecting a 0.7 percent increase.

BANK OF AMERICA FORMS COMMITTEE TO FIND NEW CEO

CHARLOTTE, N.C. — Bank of America Corp. said yesterday it created a six-member committee of directors to find a successor for CEO Ken Lewis.

The move comes two days after the bank said Lewis plans to retire at the end of the year.

The committee is being led by Bank of America Chairman Walter Massey, spokesman Bob Stickler confirmed. Massey took over as chairman earlier this year after shareholders voted at the bank's annual meeting to split the chairman and CEO positions at the bank.

Other members include Charles Gifford, Thomas May, Thomas Ryan, Donald Powell and Charles Holliday. The committee briefly met after a regular bank board meeting yesterday.

MADOFF RELATIVES SUED BY TRUSTEE FOR NEARLY $200 MILLION

NEW YORK — Bernard Madoff's brother, sons and a niece used the family finance business like a "piggy bank," a court-appointed trustee charged yesterday as he demanded in a lawsuit that they return almost $200 million in money to be distributed to cheated investors.

The trustee, Irving Picard, sought $198.7 million from Madoff's brother, Peter, who had worked at Madoff's Manhattan investment company since 1965, and sons, Mark and Andrew. Also sued was Shana D. Madoff, Bernard Madoff's niece and Peter Madoff's daughter.

Bernard Madoff, 71, is serving a 150-year sentence for the fraud in connection with a multibillion-dollar Ponzi scheme.