The nation lost a whopping 199,000 jobs last month – the biggest drop in more than 10 years, taking Wall Street wonks by surprise and rattling already jittery investors.
Shocking numbers from the Labor Department came on top of a huge decline of 84,000 jobs in August.
Upping the anxiety, too, is that yesterday’s report doesn’t count the huge waves of pink slips handed out by airlines, tourism and hotel industries in the aftermath of the World Trade Center devastation.
Those won’t begin to show up until next month.
“The worst is yet to come,” warned Steven Cochrane, labor economist with Economy.com.
“Layoffs tend to peak in the last month of a recession,” Cochrane explained, “but the U.S. is only just at the beginning of this one.”
Cochrane believes history will show the recession began in August.
Even companies who have tried to resist layoffs are succumbing.
Sun Microsystems reluctantly cut 3,900 jobs, or 9 percent of its workers. Its stock finished up 58 cents to $9.87.
Initially, stock markets sunk on the jobs news, but recovered as optimism over the President’s stimulus plan and the Fed’s ninth interest rate cut shook off fears.
The Dow Jones industrial average gained 58.89, or 0.7 percent to 99,119.77 while the Standard & Poor’s 500 Index rose 1.76, or 0.2 percent, to 1,071.38.
The tech-rich Nasdaq gained a modest 7.99, or 0.5 percent, to 1,605.30.
Yesterday’s report measures lost jobs in non-farm payrolls – manufacturing, services – but revealed that no sector of the economy was exempt.
The last time jobs fell this fast was when 295,000 jobs evaporated in February 1991.
New York has a heavy share of job losses as a result of the terrorist attacks that toppled the Twin Towers.