The US loses 1,59,000 jobs, signalling recession

The US economy has signalled the onset of recession with the loss of 159,000 non-farm jobs in the month of September. Since the beginning of the year an average of 75,000 jobs were being lost each month, which more than doubled in September amidst fears that the worst is yet to follow, as per the data released by the US Bureau of Labour Statistics.

In August 73,000 jobs were reported lost taking the continuous nine-months tally to an overwhelming 760,000 and unemployment to 6.1 per cent, expected to reach to 7 per cent, through 2009.

This is in sharp contrast to last year, when the US economy added 1.1 million more jobs.

People working part-time because of the non availability of a full time job rose by 337,000 to 6.1 million, up by 1.6 million compared to the past year.

Job losses were broad-based spread across all sectors of the economy with people working in manufacturing and construction sectors taking the brunt of the loss and will have to brace for more pink slips in the coming months in these two sectors. Healthcare, mining and government were among the sectors who added jobs in the past month.

The financial services lost 17,000 jobs, clearly indicating that the financial woes of the US economy are not restricted to the happenings in Wall Street alone.

The Bureau of Labour Statistics also said that those who have been without work for more than six months after having received unemployment money rose to more than 21 per cent which was 17.6 per cent last year.

In order to save cost in labour, which is any commercial establishment's biggest outflow, companies will reduce the strength of employees as its credit has virtually come to grinding halt, with banks refusing to lend to each other creating a freeze of the commercial money market.

Companies that have been cautious in making bigger cuts in labour despite the financial crisis, have retorted to using temporary workers and cutting down the job status of full time employees to part time ones.

This is only a temporary relief and companies will have to resort to large cuts as the economy falters and continue to shrink, not to mention the housing collapse and the credit crunch.

Companies that have laid off employees in the month of September include Hewlett-Packard, Alaska Airlines, Hanesbrands Inc, Alcoa Inc and Schering-Plough Corporation to name a few.

As the country goes to the polls next month, economy will be the prime concern for both, Obama and John McCain, with the Democratic presidential nominee senator Barack Obama pointing his finger to his republican rival, John McCain for all the ills of the American economy and McCain pointing it to Wall Street.

Speaking at a rally in Abington, Obama said, that the report of the Bureau of Labor Statistics show the failed policies of the Bush administration, which "are killing jobs every single day," and John McCain supports the same economic policies, while McCain, said the numbers are proof "the economy's on the wrong track," and wowed to set things right at both Washington and Wall Street.

Senator Hillary Clinton said, ''The full weight of the housing crisis, the market instability, the credit crunch and the other ills of our economy are coming to bear. Today's announcement that another 159,000 jobs have been lost in September is yet another reminder that we must take a fundamentally new course for our economy.

Analysis of jobs lost in September - 159,000