Unemployment rate rockets to 5-year high at 6.1 percent

? The nation’s jobless rate jumped to 6.1 percent in August – its highest level in five years – as U.S. employers accelerated workforce cuts in response to weakening economic conditions.

The Labor Department reported Friday that employers chopped another 84,000 workers from their payrolls last month, marking the eighth month of job declines. Even as the number of available jobs declined, the nation’s workforce continued to grow, and an additional 250,000 people entered the labor pool.

The result? The unemployment rate, which economists had expected to inch up to 5.8 percent from July’s 5.7 percent, instead surged to the 6.1 percent reading, a level last seen in September 2003.

The state of the labor market is a key economic driver: As the ranks of the jobless grow, still-employed workers grow concerned about their jobs and frequently cut back on spending. That caution tends to slow the economy more and can start a downward spiral.

While the nation’s gross domestic product remained relatively solid in the second quarter, thanks in part to economic stimulus checks, the labor market has been sending a much darker signal.

Friday’s data “adds weight to the case that the economy is in a recession,” said Nomura economist David Resler.

The 84,000 jobs that vanished last month only modestly exceeded the 75,000 that experts had been anticipating. But the unemployment rate is calculated from a separate survey, and those figures were bleaker.

The beleaguered manufacturing sector took the biggest hit, shedding 61,000 jobs; automakers led the way by cutting 39,000 workers, bringing the industry’s total cuts over the last 12 months to 128,000 jobs.

The construction sector, which has hemorrhaged jobs over the past year and dropped an average of 42,000 jobs a month through the first half of 2008, lost only 8,000 workers in August, suggesting that the free-fall in that industry’s employment may be bottoming out.

But the economic weakness that had been largely limited to the housing and manufacturing sectors is clearly seeping into the broader economy, affecting jobs across a broad spectrum of finance- and service-sector occupations.

The less economically sensitive sectors such as health care, education and government saw an increase in jobs last month. But retailers trimmed another 20,000 jobs, bringing the total number of such jobs lost over the past 12 months to 216,000.

The professional and business services group lost 53,000 jobs last month, with more than two-thirds of those cuts in the temporary-help field. Because employers typically let temporary workers go first when times turn bad, it is considered a bellwether of labor market trends.