Bigger than analysts expected, the rise in unemployment is thought to be linked to the slump in housing—the worst slump in 16 years.
And in August, analysts calculated a net loss of 4,000 jobs, "which had been the first monthly job loss in four years," says an article on Forbes.com. "The unemployment report is being closely followed by Wall Street, where investors believe it will provide the key piece of data the Federal Reserve will need to decide whether to cut interest rates further."
Already, because of the number of job losses in August, the Fed has cut interests rates by a "larger-than-expected half-point"; however, even after the Fed's aggressive move, economists could see that, in order to "keep the economy from sliding into a recession," the cut was needed.
