August Unemployment Report

A vicious cycle is developing in the job market. More businesses, seeing orders and sales slow, are turning cautious and laying off workers. That's been the case in manufacturing, and it's now spreading into the service sector. As layoffs increase, incomes shrink and so does consumer spending, inducing firms to continue cutting payrolls. There are exceptions, but not many, with gains in health care, mining and government. As a result, net jobs show a loss so far this year of 605,000, with more to come before conditions reverse in 2009. The unemployment rate, now up to 6.1%, will rise near 6.5% next year. The jump is disturbing, but so far during this downturn, it remains well below the 8% to 10% peaks posted during previous recessions.

Source: Kiplinger