US Jobless Rate at 5-Year High of 6.1%

The nation’s unemployment rate hit a five-year high of 6.1 percent in August as employers cut 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.

The jobless rate jumped to 6.1 percent in August, from 5.7 percent in July. And, employers slashed payrolls for the eighth month in a row. Job losses in June and July turned out to be much deeper. The economy lost 100,000 jobs in June and 60,000 in July, according to revised figures. Previously, the government reported job losses at 51,000 in each of those months.

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:

• Factories - 61,000
• Construction - 8,000
• Retailers - 20,000
• Professional and business services - 53,000
• Leisure and hospitality - 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.

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.

33,000 Jobs Cut in August

The private sector lost 33,000 jobs in August on a seasonally adjusted basis, according to payroll manager ADP. A consensus of economists surveyed by Briefing.com had expected a loss of 30,000 jobs.

The August decline included losses of:

• 78,000 jobs among goods-producing companies, the 21st monthly decline in a row.
• 28,000 jobs in August by large companies with 500+ worker
• 25,000 jobs in medium-sized companies with 50-499 employees
• 20,000 jobs in small business with less than 50 workers (after adding 46,000 jobs in July

The service sector, however, gained 45,000 jobs in August.

The report showed a sharp drop-off from July, when the private sector gained 1,000 jobs, spurred by a boost in small business employment.

The U.S. Department of Labor will release its August employment report Friday. A consensus of economists surveyed by Briefing.com expects the unemployment rate to hold steady at 5.7%, while nonfarm payrolls are seen declining by 75,000 after a 51,000 drop in July.

In another separate read on the labor market released Wednesday, employers said they would cut 377,325 jobs from May to August, according to employment consulting firm Challenger, Gray & Christmas, Inc. That is the highest level of summer job cut announcements

Workers are Looking for Jobs Closer to Home

Beyond.com, Inc., the world’s largest network of niche career communities, polled members across its network of more than 15,000 sites to discover how professionals are compensating for rising gas prices. The poll received a record number of responses, with more than 20,000 professionals weighing in to voice their thoughts on the Beyond.com poll question:“What alternatives are you considering as a result of high gas prices affecting your commute to work?”

• 79% - Find a job closer to home


• 13% - Telecommuting from home


• 6% - Public transportation or walking


• 2% - Carpooling with colleagues

High gas prices have caused many professionals to consider taking drastic measures to save money on their commute, even if it means leaving their current job. A past poll conducted by Beyond.com discovered that 27 percent of professionals travel 25 miles or more to work. However, if gas prices continue to rise, the number of workers commuting long distances could decrease significantly as many workers make the decision to find a job closer to home.