US jobless rate zooms to a giddy five-year high

The Labor Department’s report, released on Friday, showed the increasing toll housing, credit and financial crises are taking on the economy.

The report rattled Wall Street again. The Dow Jones industrial average was down about 40 points in midday trading. All major stock indexes tumbled into bear territory on 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.

The jobless rate jumped to 6.1 per cent in August, from 5.7 per cent 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 1,00,000 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 6,05,000.

Workers saw wage gains in August, however. Average hourly earning rose to $18.14 in August, a 0.4 per cent increase from July. Economists were forecasting a 0.3 per cent gain. Over the past year, wages have grown 3.6 per cent, but paychecks aren’t stretching as far.

6.1 per cent The US unemployment rate for August

84,000 Jobs slashed in August

8 Consecutive months that US employers cut payrolls

0.4 per cent Increase in hourly earnings over July