By Mark Huffman
ConsumerAffairs.com
October 3, 2008
Payrolls fell in September by the largest amount in five years. The
U.S. Labor Department reports the nation's unemployment rate was 6.1
percent, up nearly one and a half points over September 2007.
Economists said it is the strongest indicator yet that the long-festering credit crunch is finally showing up on Main Street.
"Maybe there are some lost souls out there who cling to the belief that the credit market problems are limited to Wall Street," said Joel Naroff, chief economist of Naroff Economic Advisors. "Hopefully, they will think again."
For the ninth consecutive month, firms across the nation reduced their payrolls and the September decline was the largest since March 2003. So far this year, 760,000 jobs have been lost.
"The layoffs were distressingly widespread," Naroff said. "Manufacturing, both durables and nondurables, and construction were hard hit, but don't look just at those weak links. There were cutbacks posted in retail and wholesale trade, transportation, communications, financial and real estate services, temporary help, leisure and hospitality sectors."
There were some areas where hiring actually occurred during the month, including health care, computer sciences, management consulting and private sector education. The government chipped in, but it was mostly pubic education and the postal service.
Fewer than 40 percent of all the industries had job increases, the lowest percentage since the uncertainty created by the beginning of the Iraq War. Worse, hours worked were down sharply and with wage gains slowing, the outlook for income is not good," Naroff said.
"The unemployment rate remained at 6.1 percent, but even that was not a great sign," he said. "Unemployment claims are at recession levels and we should expect the rate to climb through the rest of the year."
