Rising layoffs send unemployment soaring to 9.7%

Question of the Day

Should Congress make English the official language of the U.S.?

View results

UPDATED:

The nation’s unemployment rate surged to a 26-year high of 9.7 percent last month as employers slashed jobs in nearly every corner of the economy, the Labor Department reported Friday morning.

The total of 216,000 jobs eliminated during the month was the lowest in a year and somewhat less than the 246,000 jobs cut in July, indicating the pace of layoffs continues to slowly moderate from a peak of 700,000 a month at the beginning of the year. Still, the job cuts since last summer have been the deepest seen in modern times, and have left the nation with nearly 7 million fewer jobs than existed before the recession, the department said.

The job news heralds what is likely to be a long, “jobless” recovery in the economy. Analysts believe the economy this summer started to emerge from the steep recession that started in December 2007, but improvement in the jobs market is following the pattern of other recent recessions and lagging behind the return of growth in other sectors such as manufacturing and construction.

Click here for video.

“Job losses are diminishing as the labor market creeps ever so slowly toward stabilization,” said Bernard Baumohl, chief global economist at the Economic Outlook Group. “But employment conditions are improving at such an agonizingly slow pace that most Americans will not be able to detect any genuine improvement. That’s why consumer spending will remain weak for the balance of the year.”

Average hourly wages grew modestly by 0.3 percent in August, but weekly earnings were up by less than 1 percent over last year because employers have been slashing hours as well as jobs in their efforts to cut costs and stay afloat.

Every major sector lost jobs during the month except education and health care, where jobs have kept growing since the onset of the recession.

Unemployment rose among all groups, but hit teenagers particularly hard. More than one in four teens who are looking for work have been unable to find jobs, according to the department.

In a broader measure of the job malaise facing most Americans, a measure of unemployment that includes workers who are too discouraged to keep looking for jobs and those working part-time who would rather have full-time jobs rose to a record 16.8 percent from 16.3 percent in July.

In a sign of the depth of the employment distress, one in three workers looking for jobs has been unemployed for more than six months.

“The cycle of the mean duration of unemployment has steadily drifted upward, hinting perhaps that layoffs over time have become permanent rather than temporary,” said John Silvia, chief economist at Wells Fargo Securities.

“Job search costs and moving barriers have also drifted up over time,” he said.

Comments
blog comments powered by Disqus
TWT Video Picks