The nation's unemployment rate surged last month from 5.7 percent to 6.1 percent, a five-year high, reflecting a steady steam of job losses in nearly every sector of economy, the Labor Department reported this morning.
Businesses laid off another 84,000 workers, bringing the total of jobs that disappeared so far this year to 605,000.
The biggest job losses of 61,000 last month came in manufacturing, despite strong exports of U.S.-made goods that have enabled the economy to keep growing in the face of the relentless erosion of jobs. Health care, mining and government were among the only areas reporting strong job gains in the department's survey of businesses in August.
The sharp rise in joblessness accelerated a rout in global stock markets in Europe and Asia this morning that began with a 355 point loss in the Dow Jones Industrial Average Thursday. A report of rising jobless claims Thursday foreshadowed today's finding of a significant deterioration in the job market. Wall Street got hit again at the start of trading this morning, with the Dow down by 64 points shortly after the 9:30 open of the stock market.
The drumbeat of monthly job losses has lifted the unemployment rate by 1.4 points in the last year -- a rapid rise that economists say is almost always associated with recession.
"The spike in the unemployment rate to 6.1 percent and the eighth month of continued job losses confirm that recessionary conditions persist in the labor market," said Jared Bernstein, senior economist with the Employment Policy Institute. "Working families are in trouble."
While a previous surge in unemployment this spring was associated with teenagers and college students flooding into the labor force, last month's rise hit broadly among adults of every race and gender.
Nearly one in five teen workers remained unemployed, while joblessness surged by over a half point to 5.3 percent among adult women and to 8 percent for Hispanic workers. Unemployment soared nearly a full percentage point to 10.6 percent among black workers.
The unemployment rate is perhaps the most politically sensitive economic factor in an election, and the sharp rise in joblessness is certain to have repercussions on the presidential and congressional elections under way. Economists say the party in power usually is blamed for poor economic performance, while the party out of power benefits.
"Hidden unemployment and wages lagging inflation make the economy the most important issue dogging Republican presidential nominee John McCain," said Peter Morici, business professor at the University of Maryland. He estimated that the unemployment rate is closer to 7.7 percent when millions of discouraged workers who have stopped looking for jobs are added in.
"Quite simply, ordinary Americans have not benefited from the strong growth accomplished in recent years, and this gives Democratic candidate Barack Obama's proposals to redistribute income a lot of traction."
Taking money from the rich and redistributing it to poor people and the middle class is not likely to help people much either, he said, "but in the heat of a campaign, populist policies and promises enjoy strong appeal."
By Douglas Holtz-Eakin
The young drop coverage to avoid higher premiums
Independent voices from the TWT Communities
Television commentary, reviews, news and nonstop DVR catch-up.
We’re human: we don’t always think things through, so we accept many ideas that are, well, ideas that are wrong. We also look past certain truths without recognizing them.
The “Silver Tsunami” created by aging Baby Boomers is hitting America. Let’s explore how we adjust to it, enjoy it and defy negative expectations about age.
Viewing and reviewing the Los Angeles experimental and classic punk scene with a nod to Rodney's English Disco
Benghazi: The anatomy of a scandal
Vietnam Memorial adds four names
Cinco de Mayo on the Mall
NRA kicks off annual convention
California wildfires wreak havoc