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More jobs were lost than predicted in August raising the unemployment rate to a 5-year high of 6.1%, which could mean this is a recession. However, a recession is defined as a significant decrease in activity over a sustained period, and usually takes six to eighteen months to determine.
Payrolls were estimated to drop 75,000 after a 51,000 decline in July. Factory payrolls dropped another 61,000 after falling 38,000 the month of July. Banks, insurance companies, and restaurants all experienced cut backs in their payrolls. Retailers as well had a19,900 fall in jobs after a drop of 18,100.
The unemployment rate was expected to remain at 5.7%. No one believed that the rate would reach 6 percent, much less go above it. And with rising unemployment it makes it harder for Americans to keep up with their mortgages, which triggers layoffs in building companies. However government offices hired 17,000 workers after adding 6,000 to their payroll in July. Today the numbers show that the total decline in jobs so far this year is 605,000, after the economy created 1.1 million jobs last year.
Overall I think this is trying to tell us that despite all the jobs that were made last year we have already lost more that half of them so far with more job losses in sight. I think our economy is in serious decline and no one is really doing anything about it. The estimated unemployment for next year alone is already at 6.75% with an increase nearly guaranteed.