U.S. employers cut a surprisingly high number of jobs in August as the unemployment rate soared above 6%, inflicting more pain upon cash-strapped, debt-loaded consumers and the economy at large.
The Labor Department said Wednesday that employers cut 84,000 nonfarm payrolls last month, far above the average economist expectation of 75,000, according to
. The unemployment rate now stands at 6.1%, the highest level in five years. The consensus estimate was for the rate to remain flat at 5.7% in August.
Nonfarm payrolls have declined each of the first eight months of the year, with the economy losing 605,000 jobs, according to the Labor Department. The unemployment rate has climbed at a near-steady clip since the spring of 2007 as the construction, manufacturing, financial services, auto and airline sectors contracted. A year ago, unemployment was a full percentage point lower at 4.7%.
The construction and manufacturing sectors slashed nearly 70,000 jobs last month as the sectors continued to be hurt by housing sector weakness and high costs, respectively.
Small businesses and service-providing sectors have shown resilience throughout the year, but have begun to crack as well. The services sector slashed 27,000 jobs last month, with retailers dropping 20,000 and the leisure and hospitality sector dropping 4,000 of those workers as consumers held back on discretionary purchases and travel.