Job losses

American employers eliminated 159,000 nonfarm jobs last month, the fastest pace in five years, the U.S. Labor Department reported.

There are 497,000 Americans out of work in a weak labor market. The unemployment rate stayed at 6.1 percent after a steep climb in August.

Employers have cut jobs every month this year — 760,000 in all through September.

The unemployment report is more confirmation that the U.S. economy is in a recession or about to enter one. The size of the decline is similar to the average monthly job losses in the 2001 recession.

Although Congress has passed, with modifications, the Bush administration's financial bailout plan, the credit crisis is likely to make things worse in the months ahead, the Wall Street Journal said. It is becoming more difficult for consumers and businesses to obtain loans.

What started as sluggish activity in the housing industry earlier this year is expanding to other sectors. The financial industry cut back in September, as did retail, and leisure and hospitality.

Some gains came in education and health services. Government jobs increased marginally, but even they are expected to decline in the coming months as local and state governments struggle with finances.

Even the service sector of the economy faces contraction. Anthony Nieves of Hilton Hotels Corp., told the Journal: "Companies are consciously cutting back and culling the work force. There are companies out there trying to maintain margins and other companies trying to maintain their existence."

Millions of job seekers have stopped looking for work or taken part-time jobs. Taking those individuals into account would put total unemployment at 11 percent in September, the Labor Department said.

Workers laid off for several months are starting to run out of benefits, and will need extensions to stay afloat.

All in all, not a pretty picture. The unemployment indicators point to recession and rough months ahead.