Unemployment Rate Hits 5-Year High

Reaches 6.1 Percent In August; Employers Slash 84,000 Jobs, Labor Department Reports

(CBS/ AP)  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.

"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.

[bhappy2-2]

Of course unemployment is up, everyone wants to hire ILLEGAL ALIEN INVADERS to do the jobs that should be going to AMERICANS.
These ILLEGAL ALIEN INVADERS even have part of America brainwashed into believing THEY have a right to be here and America has an obligation to provide for their every whim. Get rid of the ILLEGAL ALIEN INVADERS and some of the American Citizens can get a job and go to work.

[libsluv2spit]

the DNC promotes this delusional scenario that you can be financially independent by just being a busboy..
the ideal liberal idea that you can make $15.00per hour as a hotel maid..oh lets skip the idea of promoting a higher standard.

[kazoodan]

If Dems have trouble seeing guys like Mitt Romney as admirable, and if the GOP have trouble seeing the average worker as admirable, we''''re never going to be able to successfully compete, are we?


Posted by SamTheTVCat at 06:37 PM : Sep 06, 2008

Well said, Sam.

[kazoodan]

No clear thinking educated person would ever be a democrat.

Posted by tiptop101 at 06:48 PM : Sep 06, 2008

Hahahaha. Good one! Just substitute the word Democrat with Republican, and you''ve hit the nail on the head, my dear boy.

Remember those tax cuts that were supposed to help the economy by creating jobs? Well, that money ain''t trickling down to anyplace but the Cayman Islands.

[tiptop101]

Who makes jobs, businesses. You should do everything you can to support the growth of businesses. Democratic policies clearly don''t support business. Business is evil, right? They support taking from them and taxing them. Your president isn''t going to create a job for you or anyone. Only a business will do that. Promote business and promote buying American made products. There''s a real cause, not on abortion, global warming, etc.

[tiptop101]

Most democrats are they way they are not for answers or to help people. The loud ones that you see on these boards do not count, and make up a tiny percent of them. The people here usually just have some axe to grind or agenda, gay rights, global warming, abortion, or some other useless topic. They let someone else do their thinking and have been influence by them. They have picked a topic that they can be passionate about to make up for what is lacking in the rest of their lives. No clear thinking educated person would ever be a democrat.

[marshall_nee]

You know whats funny; Steve lies man of CNBC tried to spin the figures by saying the rate increased due to, the extension of unemployment benefits.

That was quite a strange admision in my view, that the govmint was counting more of the real unemployed in effect.

[samthetvcat]

This class warfare *** drives me nuts - there''s like a fundamental lack of respect on both sides. One side sees the other as ''greedy'', the other sees the others side as ''lazy'' . . . and that mentality is evident in the economic plans of both candidates.

McCain''s plan doesn''t really harness the power of the awesome all-American work ethic, and Barack''s plan doesn''t really harness the power of awesome all-American big-business capitalism.

If Dems have trouble seeing guys like Mitt Romney as admirable, and if the GOP have trouble seeing the average worker as admirable, we''re never going to be able to successfully compete, are we?

[tiptop101]

You all get exactly what you deserve.

[tiptop101]

By the sounds of things, you''''re not having a nice life lately. Still have that giant loofah sponge shoved where the sun don''''t shine, do you?


I''m trying to help you IDIOTs. That''s your problem. Your too busy being an idiot instead of taking some good advice. Yes, my paid off 4200 sq ft house overlooking Vegas, working for myself, is a nice life. You could too, just make a REAL effort and stop being a USELESS democrat. You fricken people just do not get it. Go get some depression help. You would be surprised how many of you suffer from it.

[tiptop101]

Complain all day long about the budget, but if you''re the type of dem, or person, who blames the government and everyone else for your problems, then that is when it is not worth it. Yes, fight the government, but not at the expense of you having a nice life. Erase the useless government from your thinking, or get a hobby.

Thanks for whomever mentioned eating better. Another sign of America. A bunch of fat, unhealthy people. What percent is overweight, like 70% or something. You walk into an interview looking the way you do, what does that say?? No control, no discipline, bad decision maker, glutenous, does not care, no energy, etc. It is not a thyroid problem and only you are to blame. Clean yourself up.

[tiptop101]

So you believe that the majority of Americans have never done anything to better themselves

Absolutely they have not. You are completely out of touch with real America and who makes up the population. Go to bls.gov. It''s a HUGE majority of uneducated people. Why do you think the average income is about 21k in the US. These are not college educated folks. Right? Sorry, yes, they try to better themselves by trying to get more handouts from the Govt and more something for nothing. You really have no idea about the US population.

[royalia]

"One for the people who have never done anything to better themselves, which is clearly the majority of Americans. "

So you believe that the majority of Americans have never done anything to better themselves. Can anyone else help this poor child? You don''t have any idea how preposterous that sounds? I give up. Go back down your parents'' basement and continue reading Ayn Rand. In fact, everybody do that, get yourfelf a self-help book, and the current economic problems will be solved! I''m out.

[tiptop101]

Complain all day long about the budget, but if you''re the type of dem, or person, who blames the government and everyone else for your problems, then that is when it is not worth it. Yes, fight the government, but not at the expense of you having a nice life. Erase the useless government from your thinking, or get a hobby. Thanks for whomever mentioned eating better. Another sign of America. A bunch of fat, unhealthy people. What percent is overweight, like 70% or something. You walk into an interview looking the way you do, what does that say?? No control, no discipline, bad decision maker, glutenous, does not care, no energy, etc. It is not a thyroid problem and only you are to blame. Clean yourself up.

[hypnotoad72]

but not at the expense of you having a nice life.

Posted by tiptop101 at 06:10 PM : Sep 06, 2008
----------

By the sounds of things, you''re not having a nice life lately. Still have that giant loofah sponge shoved where the sun don''t shine, do you?

[tiptop101]

Complain all day long about the budget, but if you''re the type of dem, or person, who blames the government and everyone else for your problems, then that is when it is not worth it. Yes, fight the government, but not at the expense of you having a nice life. Erase the useless government from your thinking, or get a hobby.

[hypnotoad72]

Posted by tiptop101 at 05:23 PM : Sep 06, 2008
-

I was with you until youp osted that drivel; not to mention shilling for Ayn Rand''s most parroted parable... Libertarians are the best; whenever you give them FACTS, they warp THOSE into THEIR own mindset. And whine when things don''t go there way; I recall that twerpy little doffus I once worked with, "objectifying" everything and how it''s never his own fault. Especially when HE turned the topic to SUVs. That was a riot... But I digress.

I''m sure there''s a psychiatric condition that describes the condition where you look at reality and then alter it to fit your mindset, but for you I''m just too d*mn lazy to go and look it up for you.

[tiptop101]

Complain all day long about the budget, but if you''re the type of dem who blames the government and everyone else for your problems, then that is when it is not worth it. Yes, fight the government, but not at the expense of you having a nice life.

[hypnotoad72]

Where are the nitwits who, in every other article, whine and opine that these people choose to be lazy?

Bugger off.

[tiptop101]

staunch Neocon Nazi, you might want to seek professional mental health care....LMAO

Very sad, let me guess, you''re either gay, your dad was authoritarian, you bought it to global warming, you had somebody pick on you as a kid, you are influenced by others, you just have zero life, you didn''t educate yourself and are scraping by, you''re young and dumb, etc. What is it? Nobody with any thinking abilities makes a ridiculous comment like you made. You, especially you, need to find some new people to hang out with. Probably, just be gay and leave the rest of us alone. We, the productive, don''t really care if you are, as you long as you shut your pie hole.