Friday, September 5, 2008

Jobless rate at 5-year high

By Glenn Somerville

WASHINGTON (Reuters) - An unexpectedly steep 84,000 U.S. jobs were lost in August and the unemployment rate hit a five-year high of 6.1 percent, fanning worry ahead of November's presidential vote that the economy was near recession.

The eighth straight month of job cuts underlined the weakening state of labor markets and prompted back-and-forth jibes by Democratic presidential contender Sen. Barack Obama and Republican nominee Sen. John McCain about how to help.

McCain called for more job training while Obama said tax cuts for working families and aid for states was needed. The Bush administration insisted the economy was "fundamentally sound" and that an additional stimulus program was not needed.

A total 605,000 employees have been slashed from payrolls so far this year -- nearly a quarter million in the last three months alone -- which private-sector analysts said clearly implies a heightened risk of an economic contraction.

"According to our estimates, the sharp rise in the unemployment rate over the past six months translates into a recession probability of 70 percent, which is higher than in 1990-91 and 2001," said Harm Bandholz of UniCredit Markets in New York, referring to the two most recent recessions.

From Reuters

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