Manufacturing cuts 93,000 workers in worst September since 1991

Oct 10, 2001 12:00 PM

Manufacturing industries cut 93,000 workers, the most severe category hit in September as the U.S. economy suffered its steepest job loss in a decade.

Retail jobs fell 44,000 and construction payrolls declined 4,000. Finance, insurance and real estate jobs rose 14,000, one of the very few categories where businesses actually showed a net gain. The report showed that the labor market was deteriorating sharply even before the Sept. 11 terrorist attacks.

"It's very clear that we're in recession," said Kurt Karl, chief economist at Swiss Re in New York. "The (payroll) employment numbers imply that a 6% unemployment rate is on the horizon although it may be three to four months away."

September's was the biggest drop in jobs since a 259,000 jobs decline in February 1991, in the depths of the last recession, and marked the fourth fall in the last six months. Employers have cut half a million jobs since March.

Economists widely believe the attacks in New York and Washington plunged the economy into recession -- if it wasn't already in one. The attacks have badly shaken Americans' confidence in the economic outlook, an ominous sign for consumer spending, which fuels two-thirds of gross domestic product growth.