Unemployment jumps to 5 year high of 6.1 percent

[one...two...tree 2,762]

By JEANNINE AVERSA, AP Economics Writer

WASHINGTON - The nation's unemployment rate zoomed to a five-year high of 6.1 percent in August as employers slashed 84,000 jobs, dramatic proof of the mounting damage a deeply troubled economy is inflicting on workers and businesses alike.

The Labor Department's report, released Friday, showed the increasing toll the housing, credit and financial crises are taking on the economy.

U.S. stock prices slid in early trading Friday. The Dow Jones Industrial Average was down 70 points in the opening minutes of trading. All the major stock indexes tumbled into bear territory Thursday as investors lost hope of a late-year recovery. With the employment situation deteriorating, there's growing worry that consumers will recoil, throwing the economy into a tailspin later this year or early next year.

The jobless rate jumped to 6.1 percent in August, from 5.7 percent in July. And, employers cut payrolls for the eighth month in a row. Job losses in June and July turned out to be much deeper. The economy lost a whopping 100,000 jobs in June and another 60,000 in July, according to revised figures. Previously, the government reported job losses at 51,000 in each of those months.

The latest snapshot was worse than economists were forecasting. They were predicting payrolls would drop by around 75,000 in August and the jobless rate to tick up a notch, to 5.8 percent. The grim news comes as the race for the White House kicks into high gear. The economy's troubles are Americans' top worry.

"With the unemployment rate over 6 percent, it is a clear warning sign that this economy is continuing to soften faster than we thought. It is a real concern," said Joel Naroff, president of Naroff Economic Advisors. "Businesses have decided to hunker down. They are not hiring, and they are paring workers where they can. That is making things pretty tough out there."

Wachovia Corp., Ford Motor Co., Tyson Foods Inc. and Alcoa Inc. were among the companies announcing job cuts in August. GMAC Financial Services this week said it would lay off 5,000 workers.

Job losses in August were widespread, the government report showed.

Factories cut 61,000 jobs, with housing-related manufacturers and automakers among the hardest hit. Construction firms eliminated 8,000 jobs, retailers axed 20,000 slots, professional and business services slashed 53,000 positions and leisure and hospitality got rid of 4,000. Those losses swamped employment gains in the government, education and health.

Job losses at all private employers — not including government — came to 101,000 in August.

The government said workers age 25 and older accounted for all the increase in unemployment in August.

All told, the number of unemployed rose to 9.4 million in August, compared with 7.1 million a year ago. Economists predict more job losses ahead, pushing the jobless rate to 6.5 percent or higher next year.

Workers saw wage gains in August, however.

Average hourly earning rose to $18.14 in August, a 0.4 percent increase from July. Economists were forecasting a 0.3 percent gain. Over the past year, wages have grown 3.6 percent, but paychecks aren't stretching as far because of high food and energy prices.

Caught between dueling concerns of slow growth and inflation, the Fed is expected to leave a key interest rate alone at 2 percent when it meets next on Sept. 16 and probably through the rest of this year. Concerned about inflation, the Fed at its last two meetings didn't budge the rate. Before that, though, the Fed had aggressively cut rates to shore up the economy.

With the Fed on the sidelines, Democratic presidential nominee Barack Obama has called for a second round of government stimulus, while his GOP rival John McCain has favored free-trade and other business measures to spur the economy.

http://news.yahoo.com/s/ap/20080905/ap_on_...o_ec_fi/economy

[w¡n9Nµ7 §£@¥€r 123]

Job losses in August were widespread, the government report showed.

Factories cut 61,000 jobs, with housing-related manufacturers and automakers among the hardest hit. Construction firms eliminated 8,000 jobs, retailers axed 20,000 slots, professional and business services slashed 53,000 positions and leisure and hospitality got rid of 4,000. Those losses swamped employment gains in the government, education and health.

I love that description - "professional and business services"... it's broad enough and vague enough to include just about anything.

[one...two...tree 2,762]

I love that description - "professional and business services"... it's broad enough and vague enough to include just about anything.

...from the Dept. of Labor

Industry Payroll Employment (Establishment Survey Data)

Total nonfarm payroll employment continued to trend down (-84,000) in August.

Thus far in 2008, payroll employment has declined by 605,000, an average loss

of 76,000 per month. Employment continued to decline in manufacturing and employ-

ment services, while health care and mining added jobs. (See table B-1.)

Manufacturing employment fell by 61,000 in August. The largest decline

occurred in motor vehicles and parts (-39,000), which has lost 128,000 jobs

over the past 12 months. In August, employment also fell in 2 industries

related to home building--wood products (-7,000) and furniture and related

products (-7,000). Computer and electronic products manufacturing added

5,000 jobs over the month.

Within professional and business services, employment services lost 53,000

jobs in August; more than two-thirds of the decrease (-37,000) occurred in

temporary help services. Since its most recent peak in August 2006, employ-

ment services has lost 419,000 jobs.

Employment in both wholesale and retail trade continued to trend down over

the month. Within retail trade, motor vehicle and parts dealers shed 14,000

jobs. Since reaching a recent peak in April 2007, employment in motor vehicle

and parts dealers has fallen by 60,000.

Health care employment continued to grow in August (27,000), with more than

half of the gain in hospitals. Over the past 12 months, health care has added

367,000 jobs.

Employment in mining increased by 12,000 in August, with gains occurring in

all the component industries. Over the past 12 months, job growth has been

especially strong in support activities for mining (39,000) and in oil and

gas extraction (17,000).

Construction job losses in July and August averaged 14,000, compared with

an average monthly loss of 45,000 during the first half of 2008. In August,

residential specialty trade contractors lost 14,000 jobs; since a peak in

http://www.bls.gov/news.release/empsit.nr0.htm

February 2006, employment in the industry has declined by 388,000.