WASHINGTON, Sept. 5, 2008
Unemployment Rate Hits 5-Year High
Reaches 6.1 Percent In August; Employers Slash 84,000 Jobs, Labor Department Reports
-
Play CBS Video
Video
Unemployment And Campaign '08
As reports indicate that unemployment rates have reached their highest levels in over half a decade, Barack Obama and John McCain are each turning their focus to the economy. Anthony Mason reports.
-
Photo
(CBS/iStockphoto)
-
Interactive
On The Job
Explore America's labor economy, track recent major layoffs and meet key economic players.
-
Interactive
Eye On The Economy
In-depth features on U.S. markets, taxes, employment and the Federal Reserve.
The Labor Department's report, released Friday, showed the increasing toll the housing, credit and financial crises are taking on the economy.
"There’s no question that the labor market is weaker than we’d like to see," White House Press Secretary Tony Fratto said Friday. He added that the economic stimulus plan and the administration's monetary policy "will continue to support growth through this difficult period," reports CBS News White House correspondent Mark Knoller.
Despite the report, the Dow Jones industrial average climbed more than 32 points Friday. But the modest gains were not enough to avoid the index's fourth straight week of decline. 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.
So far this year, job losses totaled 605,000.
Stephen Studnicka, 54, was laid off from his New York financial services job back in December, reports CBS News business correspondent Anthony Mason. He spends four to six hours a day looking for work.
"I send out typically 50 resumes a week and I get maybe one or two responses," he said. "I have had many interviews. I have had no offers."
The job losses have been increasingly broad-based. Only the education and health sectors have shown any significant hiring, reports Mason.
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 7 percent by the fall, according to some projections.
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.
With people feeling increasingly squeezed and watching the value of their biggest asset - their home - sink in value, consumers are expected to clamp down more in the coming months.
"It takes consumers to drive the economy and if folks keep losing jobs month after month … we're not gonna have any consumers left," University of Maryland economist Peter Morici told CBS News.
A separate report out Friday showed that a record 9.2 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of June, the Mortgage Bankers Association said.
"So our feeling is house prices, by whatever measure you use, will continue to decline for the next 12 months," Stu Hoffman, chief economist at PNC Financial Services, told CBS News.
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. Both candidates seized on the job figures Friday to take swipes at each other and promoted their own ideas for getting things back on track.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
Video and Galleries from U.S.
-
Video
Harry Hurt Lobster Fishing
-
Video
Comedians New Adventure
-
Video
Hi-Tech Drones Aid Terror Hunt
- 1
- 2
- 3
- 4
...
- 6
- next
See all 298 CommentsThe time to make money as it used to be made in past years has come to an end.
Now, everyone has to work till the day they die. There ain''t no retirement anyomre. There''s only debt, unemployment and inflation.
The Good Old Day guys have done us in.
All politics aside -- this is really not good, especially since the holidays are approaching.
Repeat after me: BLEH!
"There%u2019s no question that the labor market is weaker than we%u2019d like to see," White House Press Secretary Tony Fratto said Friday. He added that the economic stimulus plan and the administration''s monetary policy "will continue to support growth through this difficult period,"
___________________
Maybe someone should tell them the "economic stimulus" package(s) have all been spent on gasoline to get us to and from work.
Or, are they planning of giving me another $600?
he has no answers, only promises he has no way of keeping. barry is clueless!
yeah i do.
Bush''s Fault.
Most ppl are just lazy.
Obama ''08
Oh and by the way Republicans did you see that segment on CNN last weekend about the Swimming Pool that was Rebuilt in Bagdad at a cost of 500,000 US Tax payer dollers so the children can have a place to swim and IRAQ is sitting on 97 billion dollars of oil revenue held in US BANKS.
WHY THE FRACK did the US TAX PAYERS pay for this Frackin swimming pool when IRAQ has 97 billion sitting in US BANKS. I would like a Republican to answer that Question !
Just another Republican HAND OUT to IRAQ and the People of IRAQ so the frackin children can swim.
At the Republican convention last night there were NO BLACK PEOPLE THERE, Fyi Republicans, RICH White People with Tans dont count as Black People, there called African Americans and there were NO African Americans in the audience last night, maybe 10 and the Republicans sure kept the camara on them for an extended amount of time. It was the same Black People Over and Over and Over again they kept showing nice try to hood wink the American Public again.
Good OLD, Abe Lincoln was there last night with his top hat I am sure all you Gun Luvin, Right Wing, Fat Chubby Pizza Eatin Republicans got a chuckle out of GOOD OLDE Abe Lincoln being in the audience.
LOOK BILLY BOB Youins see that THERE IS, ABE LINCOLN standing there in the Audience and he has his top hat.
NOTHING about the economy.
Seen the headlines today?
John and Sarah missed them.
That''s not all they missed.
CHANGE IS COMING, MY FRIENDS.
Maybe Cindy McCain should donate that $300,000.00 dress to the unemployed?
Nah.
To heck with ''em.
Not ONE speech mentioned the middle class.
No one talked about the economy, health care, or the Bush legacy.
We not...nothing.
N-O-T-H-I-N-G
Because they have nothing.
My friends.
"Fight with me."
You got it.
---------------------
Posted by CAMEO35
LMAO. I am not falling for that tricky slogan again. Did that in 2006 when the Democrats used that to gain control of Congress and now look at the mess we are in. To Thanks to that FALSE CHANGE Slogan.
Given the number of lobbyists, CEOs, special interests and religious right-wingers in the convention audience, I have no doubt Mr. McCain was utterly sincere in saying, "I work for you."
Change is coming, my friend. More than you counted on.
ON THE ECONOMY
John McCain said it in his own words: He just doesn%u2019t understand the economy. His economic plan would give big tax breaks to corporations and tax workers%u2019 health care benefi ts. We call on McCain to help turn around America, not choose corporations over working families.
McCain: I Never Really Understood Economics. McCain said, %u201CThe issue of economics is something that I%u2019ve really never understood as well as I should.%u201D (Boston Globe, 12/18/07)
McCain: Americans Have Seen Great Economic Progress Since Bush Took Office. Since President Bush took office, %u201CI think if you look at the overall record and millions of jobs have been created%u2026 you can make an argument that there%u2019s been great progress economically over that period of time,%u201D McCain said. (%u201CMoney & Politics,%u201D Bloomberg, 4/17/08)
CHANGE IS COMING, MY FRIEND!!!!!!!!!!!!!!!!!!!!!!!
-- Posted by BlameGovt at 12:45 PM : Sep 05, 2008
EXACTLY, my friend!
McCain lifted that line from Obama.
Doesn''t it sound FALSE coming from the lips of a guy who voted for Bush, over NINETY PERCENT of the TIME?????????????
Sure does.
My friend.
McCain Dismissed Concerns on Mortgage Crisis and Economy. While campaigning in Florida, McCain dismissed concerns about the economy. %u201CEven if the economy is the, quote, No. 1 issue, the real issue will remain America%u2019s security,%u201D McCain said. %u201CAnd if they choose to say, %u2018Look, I do not need this guy because he%u2019s not as good on home loan mortgages or whatever it is, I understand about that, I will accept that verdict. I am running because of the transcendental challenge of the 21st century, which is radical Islamic extremism.%u201D (The New York Times, 1/28/08)
But Economic Issues Top Working Family Concerns. According to a Kaiser Family Foundation survey, the price of gasoline is the number one concern for the public. In second and third place are finding a good job and paying for health care and insurance. (Associated Press, 4/29/08)
Home foreclosure filings have increased by 112 percent over the past year, to 649,917 properties in the first quarter of 2008, representing one of every 194 households. (RealtyTrac Staff, 4/29/08)
I couldn''t figure out how he got elected governor of Texas, except through skillful handling by his handlers to not have interviews or debate Ann Richards, or talk in general.
Bush didn''t know how to do his job, so now the rest of the country can''t afford anything. We aren''t spending money, because we don''t have any to spend.
Obama 08!! The only choice to get this country on the right track.
Posted by BlameGovt at 12:53 PM : Sep 05, 2008
.................
Even more sad, klansmen like yourself can post this garbage. Go back to your cave.
[Posted by BlameGovt at 12:33 PM : Sep 05, 2008]
sounds like you may need to review the machinations of the legislative process.
there are plenty of republicans still in the process ... and they have effectively stood in the way of having anything done ... except of course to fund the war and talk about extending the tax breaks.
but strangely you make no reference to them at all. i assume you''re writing all your congressman and senators (regardless of party) to let them know what you expect them to act upon.
--------------------------------------------------------------------------------
Posted by bobnjersey at 01:14 PM : Sep 05, 2008
Repugs are too simple minded to understand the Legistrative process, don''t you know that? Black/White. good/bad. The concept of grey is like a totally different dimension to them.
Your polls are very different than the GALLOP polls. One of you is wrong - obviously. You push yours and ignore Gallop as if you want a horse race. You write this article reporting the loss of 84,000 jobs. Is that not attached to the Bush Administration and thus to McCain who is offering the same approach? Maybe I''m crazy - but should,t you be pointing that out?
CBS is changing. I want Dan Rather back. You are playing it safe. No more going out on limbs. You seem to have moved away from aggressive reporting. It''s like you have no point-of-view. CBS had the finest news corps. Careful - NBC and MSNBC are taking over.
I miss CBS. Sad.
---------------------------------------
Posted by dinkydog1
A very typical Obama Supporter response. Truth hurts I guess.
Whatever happened to the "Party of Responsibility"?
It seems to have turned into the "Party of Slime and Smear".
Sad.
[Posted by BlameGovt at 12:33 PM : Sep 05, 2008]
I''m tired of hearing this lame excuse. The Dems have controlled congress (and by the slimmest margin) for the last year only...7 of the past 8 years have been in the incompetent, soulless, maniacal hands of the GOP...it''s just that simple. To take 7 years worth of failed policy (the fruits of which this country is starting to see now)under the GOP and place the blame for the results on the last year of Dem control is petty, mindless and outrightly ludicrous. And...the dems may control congress, but its pretty hard to be effective when our loser in command cowboy leader vetoes everything that heads his way. You people are so riled up on the highs of unconditional patriotism that you''ve forgotten what it means to be human...to consider other people and their needs. Read Dr. Bartlet''s (from Princeton U.) book...it''s a doozy and should shut you pinheads up once and for all.
Repugs are too simple minded to understand the Legistrative process, don''''t you know that? Black/White. good/bad. The concept of grey is like a totally different dimension to them.
-----------------------------------
Posted by midvale3
Just a couple of Elitist comments from Obama Supporters. So typical of the party who uses the tactics of name calling, playing the race card and then denial. Good little boys.
Posted by BlameGovt
_____
Is this the same "do nothing Democrat" Congress whose razor-thin majority in the Senate allows the Republicans to block each and every bill they don''t like from a vote? That would suggest that it''s really the same old GOP that''s blocking new legislation, doesn''t it?
You should really try a new angle, BlameGovt, this one has really worn thin and has been successfully refuted too many times.
This 1.14 point difference over 8 years would yield much more income per person than one could expect from a tax cut.
The wealthiest of families (95th percentile) fared ALMOST as well under Repubs as under dems...but the dems still win that margin by about .22 percentage points.
Families of the 20th percentile (the poorest) did significantly better under dems than repubs (2.64 percent versus 0.43 percent). Consider this: 8 years of a .43 percent annual growth rate increases a family''s income by 3.5 percent, while 8 years at 2.64 percent growth increases it by 23.2 percent!!!!!
now...you tell me...who''s better for America?
You should really try a new angle, BlameGovt, this one has really worn thin and has been successfully refuted too many times.
-----------------
Posted by shoebox119
What angle - the truth hurts, but go ahead and vote for that change. Blame it on someone else. Must be an African American Culture thing.
A start.
As bad as this news is it could be worst! If Americans didn`t scream then Dubai could be managing U.S. Ports and Security and the number of loss jobs would be higher at 168,000 jobs lost, so screaming works! :)
Well, they did have hearings on steroids in baseball.
Bush?--he laughs at the problem, then goes on vacation in Texas.
McCain--he''s the biggest friend the Mexican trucking lobby has.
Fact is, Republicans like high unemployment, as it makes it easier to bust unions, and it keeps uppity peasants in their place--keeping rich Republicans rich and richer.
- 1
- 2
- 3
- 4
...
- 6
- next
See all 298 Comments