Many of these cuts won't start taking effect until this month and into October.
And on Friday, cuts of up to 15,000 were revealed, with the US largest mortgage lender, Countrywide, revealing plans to slash up to 12,000 jobs over the next quarter (20% of its employees), and several other lenders adding cuts as well. Countrywide's cuts were the biggest in the mortgage industry so far during the worst housing slump in 16 years.
More than 15,000 jobs were cut last week alone, as National City Corp. and Lehman Brothers Holdings Inc. disclosed reductions. IndyMac, another lender, revealed 1,000 in cuts. First American Corp, America's largest property title insurer, said late last week it would sack 1,300 people to cut costs as business slows
That's why some optimistic commentary in the wake of the August numbers about one-off cuts and the housing industry bearing the brunt, seemed unduly sunny.
All forecasts had been wide of the mark for August and the Wall Street consensus was for 110,000 new jobs being created.
That wasmade to look even more over the topby the downward revision on jobs creation numbers for June and July of a cut of 81,000.
Some analysts also took heart that the US unemployment rate held at 4.6% but that was only because just on 600,000 people left the workforce in August. If they had stayed looking for work, there could have been a rate above 4.7%.
What shocked many commentators was the loss of jobs in manufacturing where factory payrolls fell 46,000, the most since July 2003, after slipping 1,000 in July.
While economists had forecast a drop of 10,000 in manufacturing employment, they had also been pointing out that manufacturing, especially in the US export sector, had been very strong because of companies taking advantage of the weaker dollar to boost sales. But not by enough to offset the slump
The loss of jobs amongst builders was expected: in August it was 22,000 jobs gone after 14,000 were eliminated in July. Governments cut 28,000 jobs in the month.
The service industries, which include banks, insurance companies, restaurants and retailers, added 60,000 jobs after boosting payrolls by 78,000 in July and retailers added 12, 500 jobs.
And this is why there's another bad month or two to come in the US. Analysts pointed out that the US Labor Department's employment survey covered the week of August 12 when the credit crunch and global stockmarket falls were starting. Tens of thousands of job cuts were announced in the following weeks.
September and October could see sharper losses and analysts are now counting on that expectation to force the Fed into a cut of 0.25% to 0.50% in the Federal Funds rate next week.
