Highest Monthly Job Loss In 5 Years

Employers Slashed Payrolls By 159,000 In September

(CBS/ AP)  Jobs are vanishing at the fastest pace in more than five years with pink slips likely to keep stacking higher in the months ahead, an urgent signal the country may be careening toward a deep and painful recession just as Americans prepare to elect a new president.

Whether that's Democrat Barack Obama or Republican John McCain, one of them will be dealing with the weakest employment climate in years.

Increasingly skittish employers dropped the ax even harder in September, chopping payrolls by 159,000 - more than double the cuts made just one month before. It was the ninth straight month of job losses. A staggering 760,000 jobs have disappeared so far this year.

The Labor Department's report, released Friday, also showed that the nation's unemployment rate was 6.1 percent, up sharply from 4.7 percent a year ago. Over the last year, the number of unemployed people has risen by 2.2 million to 9.5 million.

"Washington, the labor market has a problem," said Joel Naroff, president of Naroff Economic Advisors. "Firms are hunkering down and running as lean as possible. ... We are likely to see more months of job losses before conditions turn around."

The unemployment rate for blacks shot up to 11.4 percent, the highest since late 2003.

Even with Congress' unprecedented $700 billion financial bailout, the faltering economy and the jobs market probably will get worse. Many believe the economy will jolt into reverse later this year - if it hasn't already and will stay sickly well into next year.

"The consensus of economists that I've talked to are saying we are now at the beginning of what is probably going to be a deep recession for the next six months," said CBS News correspondent Anthony Mason. "This bill had to pass to put a tourniquet on that - to hold it from getting worse - but the economy is going to go through a really rough ride."

The unemployment rate could hit 7 or 7.5 percent by late 2009. If that happens, it would mark the highest since after the 1990-91 recession. Some economists say the jobless rate could rise even more before the situation starts to get better.

Pressure is growing on Federal Reserve Chairman Ben Bernanke to do an about-face and lower a key interest rate in a bid to revive the economy. Many now think that will happen at the Fed's next meeting on Oct. 28-29 or even earlier.

The hope riding on such a move would be to spur nervous consumers and businesses to spend more freely again. They've clamped down as housing, credit and financial problems intensified last month, throwing Wall Street into chaos.

On Wall Street, the Dow Jones industrials slid 157.47 points after relief over the bailout plan's passage gave way to worries about the economy.

Friday's employment snapshot is the last before America goes to the polls in November.

Mounting job losses, shrinking paychecks, shriveling nest eggs and rising foreclosures all have weighed heavily on American voters.

The economy is their No. 1 concern. An Associated Press-GfK poll earlier this week showed that likely voters now back Obama 48 percent to McCain's 41 percent. They believe Obama is better suited to lead the country through the financial turbulence.

"I will rebuild the middle class and create millions of new jobs by investing in infrastructure and renewable energy," vowed Obama.

McCain pledged to "open markets around the globe for our products, cut taxes and expand domestic production of energy ... I will create jobs and get the economy on the right track."

White House spokesman Tony Fratto called the latest employment figures disappointing "but not unexpected given the shocks to the economy."

The 159,000 tally of total job losses - government and private payrolls - was the most since March 2003, when the labor market was still struggling to get back on its feet after being knocked down by the 2001 recession. The picture was even darker for private employers. They cut 168,000 jobs last month, the 10th month of such losses.

The pink slips were widespread.

Manufacturers (especially auto makers), home builders, retailers, securities and investment firms, hotels and motels, accountants and bookkeepers, architects and engineers, and legal services all cut back. So did temporary help firms - usually a barometer of future hiring. That overwhelmed employment gains by the government, in education, health care and elsewhere.

Cost-cutting employers are getting rid of workers as companies chafe under all the economy's problems. Companies announcing layoffs in September included Hanesbrands Inc., Hewlett-Packard Co., Schering-Plough Corp., Alaska Airlines and Alcoa Inc.

Spooked consumers and businesses have pulled back so much that some analysts fear the economy could stall out - or even worse - shrink in the July-to-September quarter. Many predict the economy will contract in both the final quarter of this year and the first quarter of next year, meeting the classic definition of a recession.

"The economy was on the way down even before the latest tightening in the credit crunch," said Nigel Gault, economist at Global Insight.

Wage growth for workers is slowing, meaning they'll be more hard-pressed to spend and help the ailing economy.

Average hourly earnings rose to $18.17 in September, a 0.2 percent increase. That was half the pace logged in the previous month. Over the past year, wages have grown 3.4 percent, but paychecks aren't stretching as far because of high food and energy prices.

Strains on Americans were sorely evident. The number of consumer bankruptcy filings rose about 29 percent in September from a year ago, the American Bankruptcy Institute reported Friday.

The financial crisis that intensified in September is forcing a seismic shake-up on Wall Street.

Lehman Brothers, the country's fourth-largest investment bank, filed for bankruptcy protection. A weakened Merrill Lynch, deciding it couldn't go it alone anymore, found help in the arms of Bank of America. AIG was thrown a financial lifeline. And, the last two investment houses - Goldman Sachs and Morgan Stanley - decided to convert themselves into commercial banks to better weather the financial storms. The number of banks that have failed this year are up sharply from last year. On Friday, Wachovia Corp. said it will be acquired by Wells Fargo & Co. wiping out Wachovia's previous plan to sell its banking operations to rival suitor Citigroup Inc.

[sjc_1]

I have heard that the unemployment numbers used to be a survey and not a database of payrolls or filings. They have payroll numbers and unemployment filings, but the unemployment numbers were based on door to door surveys. If you were unemployed and gave up, you were not counted as unemployed.

[mom_o_truth]

The REAL UNEMPLOYMENT NUMBER has been above 10 % since Mid 90''s. The labor department counts only those new filings, year to year, not those who remain unemployed for several years.

[sjc_1]

There are usually home sales and foreclosures when there are job losses. This time there is a bad market, so people can not sell their homes and they will be foreclosed.

[riddelup]

Who cares besides the taxpayer and that is not enough

[pirmin3]

I wonder if there was any pork in the bail out bill to buy people tents to live in after they get thrown out of their homes.

[irmcvet97]

Americans are out of work yet we still ave illegal aliens here, strange isn''''t it. I look forward to the day the loser in the Whitehouse is gone. I will leave if Obama win though. i have set things up so I can immigrate to canada, and plan to do so and renounce my US citizenship. My son does not deserve to pay for that idiots bad decissions, nor do yours, unless you are too stupid or sheeplish to do something about it. saying "we can not do anything about it" is what that loser is banking on and chances are you will do nothing about it at all. Sheeple pay dearly

Posted by mrcrosby1 at 12:57 AM : Oct 04, 2008

That is what Conservatives did when those Radicals overthrew the King so YOU will not be the first to leave for Canada. LOL When you KNOW what you have is the WORST and ONE of those who wants to replace the WORST says he will continue that SAME Policy? Yeah anyone supporting THAT insanity should leave... We''re much better off without that!

[apprxam]

Hey...I wanna give a warm welcome to Nevada''s newest longtime resident...Mr. O.J. Simpson!!

Doing what California can''t for over eighty years.

Rot in Hell, Juice, Buddy. What happens in Vegas, keepz U in Vegas Sheriff''s Dept.

[drinuk]

You made your bed AMERICA, You ignored Dr Ron Paul who told you all what was going on and now you have no choice. McCain or Obama is NO CHOICE it''s a fudge, it''s second best yet again, You just never learn !

Any Politician who is deliberately prevented from running by his own party is the Honest one you should have chosen, instead of Clinton v Paul, you have two Muppets which equals No Bloody Choice at all.

By the way, Has anyone seen CHENEY ?

Oh! as anyone seen Cheney ?

[talk2chief]

We the people of the United States exist no more. The recent 700 billion dollar bailout of the failed financial and banking industry illustrates that our congress only serves the top 1% of the very elite of American citizens. With the bailout they secure future lobby dollars and the middle class will become the serfdom of a national debt. Both the republican and democratic parties are engaged in an uncivil war of politics of petty party power differences and ignore the small people, the constituents they are supposed to represent. In September 2008 159,000 jobs are no more and a deep recession has arrived with more jobs sure to fade. House Speaker Nancy Pelosi stated the bill was required "begin to shape the financial stability of our country and the economic security of our people." Too late, the die is cast; throwing more tax payer dollars into the abyss (national debt) will not ward off economic failure.

[shanev137]

A staggering 760,000 jobs have disappeared so far this year.


-----------

but hey.....we''re not in a recession.

[easeup-2009]

Posted by endrepubs at 08:33 PM : Oct 03, 2008

LOL!!!! You are so full of it!!!France has actually the 4th highest tax rate in the WORLD!

Enjoy the socialistic cesspool!

[downtowner97]

I just can''t wait until John McCain gets in so he can fix all this mess he helped create. I can just picture Obama saying "Screw you all, I''m going to Canada".

[shanev137]

Let me guess....people are shocked by this news.

[toby2957]

You want to talk about panic?

I called my bank (BofA) last week and arranged to withdraw my entire savings account except for about $50--so they''''d still have to do administrative work accounting for it and send me monthly statements. That was about $122,000 in total. It takes about a week advance notice to withdraw a large amount of money.

They freaked! They transferred me to 3 different managers to ask why and to try to talk me out of it. But I stonewalled them and told them I was absolutely committed to doing it. Then they tried to arrange for a cashier''''s check, but I wouldn''''t have any of it. "Cash only, please!," I said.

When I finally came into my local branch, they took me aside and tried to talk me out of it again. When I refused, they took me aside, away from all the other customers, and tried to do it all VERY quietly so no one else would see. That just pissed me off more.

I said in a very loud voice, "No, I want to withdraw all my money right now, all $122,000 of it! The banking industry has lost my trust. You guys have been playing fast and loose with MY money for a long time and I don''''t like it!"

People''''s heads in line turned. The bankers couldn''''t wait until I left.

If they want my trust, they should reduce their leverage to a reasonable amount, say, 1:5. EARN my trust; it''''s not free.

Posted by gce65 at 06:12 PM

LOL! Good for you!

[toby2957]

More job losses? Thanks Bush. Thanks neocons. How much money did we spend on the Iraq War this month? A billion? More?

As if anyone actually needed MORE evidence that Bush and the neocons have destroyed that which we hold most dear.

[gce65]

Why doesn''t anyone talk about the TRUE unemployment rate? The 6.1% is only those people seeking unemployment benefits. It does NOT account for those who have exhausted unemployment benefits or those who have stopped looking for jobs, or the homeless.

Other nations measure REAL unemployment, not the sham figures that the US measures.

[gce65]

You want to talk about panic?

I called my bank (BofA) last week and arranged to withdraw my entire savings account except for about $50--so they''d still have to do administrative work accounting for it and send me monthly statements. That was about $122,000 in total. It takes about a week advance notice to withdraw a large amount of money.

They freaked! They transferred me to 3 different managers to ask why and to try to talk me out of it. But I stonewalled them and told them I was absolutely committed to doing it. Then they tried to arrange for a cashier''s check, but I wouldn''t have any of it. "Cash only, please!," I said.

When I finally came into my local branch, they took me aside and tried to talk me out of it again. When I refused, they took me aside, away from all the other customers, and tried to do it all VERY quietly so no one else would see. That just pissed me off more.

I said in a very loud voice, "No, I want to withdraw all my money right now, all $122,000 of it! The banking industry has lost my trust. You guys have been playing fast and loose with MY money for a long time and I don''t like it!"

People''s heads in line turned. The bankers couldn''t wait until I left.

If they want my trust, they should reduce their leverage to a reasonable amount, say, 1:5. EARN my trust; it''s not free.

[slim1h2o]

The Morons in charge, their agenda,,


Divide and conqour,,,

Thats the new political agenda,,,the haves, against the have nots.


Or class warfare,,,lets do it!!!



Lets Roll,,,middle class,,stand down,,,stop working,,we''ll show really who''s in charge.




And it''s us,,,the middle class.





This country can''t go without an engine, and the middle class is the engine that runs ths country.




You can''t out class the middleclass, and that''s for danm sure,,,,,

[slim1h2o]

I agree. Its just that their ability to stare into the face of their abject failures and call them a success amazes me.


--------------------------------------------------------------------------------

Posted by omega40 at 01:33 PM : Oct 03, 2008


I agree!!!!

It''s time to hang these basturds. Plain and simple!!

[nolalou]

Unemployment remained steady at 6.1%. How is that an increase. The rate is unchanged. This is just another CBS liberal scare tactic story.

Posted by redbds

This is not some story created by CBS, you IDIOT! Is is a report released by the U.S. Labor Department! The 6.1 percent stayed the same because they don''t count people who have given up looking for work! The story is being reported by all media outlets, so stop blaming the so called Liberal Media!