WASHINGTON — The nation's unemployment rate bolted above the psychologically important 6 percent level last month for the first time in five years _ and it's likely to go even higher in the months ahead, possibly throwing the economy into a tailspin as Americans pick a new president.
A blizzard of pink slips propelled the jobless rate from 5.7 percent in July to 6.1 percent in August, the Labor Department reported Friday. Such a sharp increase is usually a strong recession warning, and it dashed investors' hopes for a late-year recovery.
Worried about the economy and their own business prospects, employers cut payrolls by 84,000 in August, marking the eighth straight month of losses.
So far this year, a staggering 605,000 jobs have vanished _ slightly less than the population of Alaska. The economy needs to generate more than 100,000 new jobs a month for employment to remain stable.
Richard Yamarone, economist at Argus Research, feared that the jobless rate would cause consumers and businesses to "move from a moderately concerned stage to outright fear" and reduce their spending even more.