Unemployment rate unexpectedly soars to 6.1%
Nonfarm payrolls fall by 84,000 in August, more than expected
By Greg Robb, MarketWatch
Last update: 9:13 a.m. EDT Sept. 5, 2008Comments: 93WASHINGTON (MarketWatch) -- The unemployment rate soared to 6.1% in August, the highest rate in almost five years, as the economy took a turn for the worse. The rate has steadily climbed this year from a cycle low of 4.4%.
U.S. stock futures dropped sharply after the data were released Friday morning.
Nonfarm payrolls decreased by 84,000, the Labor Department reported Friday, more than the 75,000 drop expected by economists surveyed by MarketWatch. See Economic Calendar.
"It looks pretty dismal. The theme [is] of a U.S. economy sliding ever so surely into recession," said Michael Gregory, a senior economist at BMO Capital Markets in Toronto. In the months ahead, job losses of more than 100,000 will be much more commonplace, he said.
The factory sector, especially the auto industry, shed jobs in August. Employment services, considered a bellwether of future labor-market trends, also had sharp losses.
The weak labor market is sure to rekindle fears of an incipient recession among traders. Economists have been warning that the economy appeared to be stalling, but Wall Street was dazzled late last month by the strong 3.3% GDP growth reported in the April-June quarter.
Other aspects of the report pointed toward a weakening labor market.
Payroll losses in the previous two months were larger than previously estimated.