Unemployment Hits Highest Level; Some Sectors Grow

The U.S. jobless rate soared to 9.7 percent in August up from 9.4 percent in July. Nonfarm payrolls declined 216,000 last month, significantly better that the 276,000 drop in July, the Labor Department said today. The August drop is smaller than the 225,000 decline economists had expected.

Even though the loss is huge by historical standards, it's an improvement; monthly job cuts earlier in the year totaled as much as 700,000. The economy has lost 7.4 million jobs since the recession started in December 2007.

The rise in the unemployment rate rose to 9.7 percent in August resumed a steep upward path that has been only rarely interrupted since the recession began in December 2007. The unemployment rate, calculated using a survey of households as opposed to companies, grew to 9.7%, the highest level since June 1983 when the rate was 10.1%. In July, the unemployment rate had declined for the first time since April 2008. The unemployment rate was under 6% less than one year ago.

According to Friday's employment report, average hourly earnings were up $0.06 last month at $18.65. That was up just 2.6% from one year ago. Economists report that this is an indication that inflation isn't a risk for the Fedederal Reserve.

The report noted that employment last month in manufacturing fell 63,000. Construction employment, meanwhile, was down 65,000 and employment in the service sector -- the main source of U.S. jobs -- fell 80,000. Business and professional services companies shed 22,000 jobs and retail trade cut 10,000 jobs and leisure and hospitality employment shed 21,000.

The bright spot was education and health services, where employment rose by 52,000. The government shed 18,000 jobs. The average workweek was unchanged at 33.1 hours according to the report.