WORLD> America
US employers cut jobs by most in more than 5 years
(Agencies)
Updated: 2008-10-03 22:01

Cost-cutting employers are getting rid of workers as companies chafe under a slew of problems related to the economy's slowdown, a painful housing collapse and a dangerous credit crunch.

Companies announcing layoffs in September included Hanesbrands Inc., Hewlett-Packard Co., Schering-Plough Corp., Alaska Airlines and Alcoa Inc.

Friday's employment snapshot is the last before America goes to the polls in November.

Mounting job losses, shrinking paychecks, shriveling nest eggs and rising foreclosures all have weighed heavily on American voters.

The economy is their No. 1 concern. An Associated Press-GfK poll earlier this week showed that likely voters now back Democratic presidential contender Sen. Barack Obama 48 percent to GOP rival John McCain's 41 percent. They believe Obama is better suited to lead the country through the financial turbulence.

To avert even more economic upheaval, Congress is weighing a $700 billion plan to buy bad assets from banks and other institutions to shore up the financial industry. The legislation is urgently championed by President Bush and his top economic generals.

Spooked consumers and businesses have pulled back so much that some analysts fear the economy could stall out - or even worse - shrink in the July-to-September quarter. Many predict the economy will contract in both the final quarter of this year and the first quarter of next year, meeting the classic definition of a recession. The economy's last recession was in 2001.

Wage growth for workers is slowing.

Average hourly earnings rose to $18.17 in September, a 0.2 percent increase from the previous month. That was half the pace logged in the previous month and was weaker than the 0.3 percent gain economists were expecting. Over the past year, wages have grown 3.4 percent but paychecks aren't stretching as far because of high food and energy prices.