WASHINGTON – Jobs are vanishing at the fastest pace in more than five years with more pink slips likely in the months ahead, a signal the country may be careening toward a deep and painful recession.
Increasingly skittish employers in September chopped payrolls by 159,000 – more than double the cuts made one month before. It was the ninth straight month of job losses. A staggering 760,000 jobs have disappeared this year.
The Labor Department’s report, released Friday, also showed that the nation’s unemployment rate was 6.1 percent, up sharply from 4.7 percent a year ago. Over the past year, the number of unemployed people has risen by 2.2 million to 9.5 million.
“Washington, the labor market has a problem,” said Joel Naroff, president of Naroff Economic Advisors. “Firms are hunkering down and running as lean as possible. … We are likely to see more months of job losses before conditions turn around.”
Even with Congress’ unprecedented $700 billion financial bailout, the faltering economy and the jobs markets probably will get worse. Many believe the economy will jolt into reverse this year – if it hasn’t already – and stay sickly well into next year.
The unemployment rate could hit 7 percent or 7.5 percent by late 2009. That would be the highest rate since after the 1990-’91 recession. Some economists say the jobless rate could rise more before the situation starts to get better.
Pressure is growing on Federal Reserve Chairman Ben Bernanke to do an about-face and lower a key interest rate in a bid to revive the economy. Many now think that will happen at the Fed’s next meeting, on Oct. 28 and 29, or even earlier.
The hope riding on such a move would be to spur nervous consumers and businesses to spend more freely again. They’ve clamped down as housing, credit and financial problems intensified last month, throwing Wall Street into chaos.
The 159,000 tally of total job losses – government and private payrolls – was the most since March 2003, when the labor market was still struggling to get back on its feet after being knocked down by the 2001 recession.
The pink slips were widespread.
Manufacturers, home builders, retailers, securities and investment firms, hotels and motels, accountants and bookkeepers, architects and engineers, and legal services all cut back. So did temporary help firms. That overwhelmed employment gains by the government, in education, health and elsewhere.