WASHINGTON - — WASHINGTON - - The surge in the nation's unemployment rate last month to a 26-year high underscored that the weak labor market remains a menacing threat to the economic recovery.
Employers dropped another 216,000 nonfarm jobs in August, pushing up the unemployment rate to 9.7% from 9.4% in July, the Labor Department reported Friday.
The latest losses were smaller than the 276,000 jobs eliminated in July and a third of the monthly cuts in the first quarter, a trend that apparently encouraged investors and sparked a rally on Wall Street. But on Main Street, the retrenchment by employers has been so broad and deep that more and more baby boomers in the prime of their careers are getting caught in layoffs.
During the prior two recessions, in 1990-91 and 2001, people in their mid-40s to mid-50s continued to show employment gains as younger workers felt the brunt of the cutbacks. But since the current economic downturn began in December 2007, employment in the 45-54 age group has fallen by more than 1.2 million, according to the Labor Department.
"It's an across-the-board pain," said David Card, a labor economist at the University of California, Berkeley.
The labor woes of this group may be of particular concern, analysts say, because many of them are in the prime of their wage-earning years and also saw substantial losses in housing and stock wealth. Worried about saving for retirement and paying their children's college tuitions, they have slashed their discretionary spending - something that is being felt especially hard by retailers and consumer-product businesses, which are responding by trimming even more workers.
Even as the broader economy shows signs of reviving, thanks in part to the government's economic stimulus package, many economists regard solid consumer spending as a key to a sustained recovery. But with hiring sluggish and unemployment expected to hit 10 percent later this year and stay high for some time, many people aren't opening up their pocketbooks, especially those without jobs.
By the government's count, more than 14.9 million Americans are jobless on this Labor Day weekend.
Deborah Peterson, of Long Beach, Calif., is one of them. The 51-year-old has been out of work since April 2008, when she was laid off with 4,000 other employees at Hertz Corp. On Friday, Peterson recalled living large as a regional manager of membership programs for the rental car firm, pulling in around $90,000 a year, including company perks.
