TOPICS > Economy

Unemployment Rate Jumps to Five-Year High

BY Admin  September 5, 2008 at 9:45 AM EST

Man looking for work; AP photo

The Labor Department said Friday that 84,000 jobs were lost in August, 60,000 in July and 100,000 in June. The jobless rate in August surpassed July’s rate of 5.7 percent.

The latest figures were worse than forecasts from economists, who had predicted a loss of about 75,000 jobs and a jobless rate of 5.8 percent for August.

“With the unemployment rate over 6 percent, it is a clear warning sign that this economy is continuing to soften faster than we thought. It is a real concern,” said Joel Naroff, president of Naroff Economic Advisors, according to the Associated Press. “Businesses have decided to hunker down. They are not hiring, and they are paring workers where they can. That is making things pretty tough out there.”

Among the companies announcing job cuts in August were Wachovia Corp., Ford Motor Co., Tyson Foods Inc. and Alcoa Inc.

The Labor report said factories cut 61,000 jobs, with housing-related manufacturers and automakers among the hardest hit, the AP reported.

“The economy is clearly deteriorating,” said Gary Thayer, senior economist for Wachovia Securities in St. Louis, quoted Reuters. “We’re also seeing weakness around the globe so there’s less reason for the Fed to focus on inflation and more reason to focus on getting the economy back on its feet.”

In total, the number of unemployed soared to 9.4 million in August, compared with 7.1 million a year ago.

Workers saw wage increases, however. Hourly earnings rose to an average of $18.14 in August, which was a 0.4 percent increase from July.