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December 2, 2008 7:44:18 PM CST

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Unemployment Rate Hits 5-Year High of 6.1%

Posted Sep 5, 08 8:43 AM CDT in Business 

(Newser) – Jobless figures came in worse than expected today, sending the unemployment rate to a nearly five-year high of 6.1%, Bloomberg reports. The US lost 84,000 jobs in August, the eighth straight month of declines, raising the specter of a worsening economic slowdown. The jump in unemployment, which was expected to remain unchanged, coupled with tight credit and falling consumer spending, could bring economic expansion to a standstill.

Factory payrolls were hit hardest, with 61,000 jobs vanishing when only 35,000 were expected to do so. The service sector shed 27,000 rather than the expected 12,000, and government payrolls increased 17,000. The economy has trimmed 605,000 jobs this year after creating 1.1 million in 2007. The losses will soften economic growth in the third quarter, following July’s plunge in consumer spending that was the worst in four years.

Source Bloomberg

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In this May 14, 2008, file photo, planes are lined up for the finishing touches at the Cessna manufacturing plant in Bend, Ore. Factory jobs were hit hardest in August.   (AP Photo/Don Ryan, file)
In this July 28, 2005 file photo, Dameon Hogan installs a dashboard into a Jeep Cherokee at the Jefferson North Assembly Plant in Detroit. Factory jobs were hit hardest in August.   (AP Photo/Paul Sancya, file)
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We have a labor market that's bleeding jobs. Consumer spending already looks like it'll retrench. It increases the risk of a deeper recession. - Sal Guatieri, senior economist at BMO Capital Markets, Toronto

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