With house prices waning, energy costs soaring and credit lines crunching, the U.S. economy is undeniably under the weather. The labor market has taken a hard hit by the economic situation as indicated by the alarming, recently released numbers, and experts suggest that it will get worse before it gets better. But how exactly are the numbers allocated, and worse even, how is the report a pebble in the pond?

The U.S. Department of Labor reported a loss of 84,000 jobs in August, spiking the unemployment rate to 6.1 percent, its highest peak since Sept. 2003. With a total of 605,000 jobs lost in the first eight months of the year, the country is facing an average monthly loss of 76,000 jobs, compared to an average monthly gain of more than 116,000 jobs in 2007. The department had also reported a sudden and unexpected jump in the number of unemployment claims to 440,000 after three weeks of declines, making for 3.4 million people who receive unemployment benefits, excluding those who qualify for the extended assistance program approved by Congress in June.

The stock market was the first to react to the alarming numbers as the Dow Jones industrial average, S&P 500 and the Nasdaq composite took an early tumble on the day of the announcement. The unemployment woes are certain to stimulate more losses; although consumer spending increased by 1.7 percent during the second quarter, the new numbers are likely to put a dent in consumer confidence. The manufacturing sector lost 61,000 jobs in August, with the largest decline coming about in the auto sector. Meanwhile, the retail sector lost nearly 20,000 jobs.

The enormous number of losses has fueled a turnaround in sectors that have usually been sources of growth, particularly major financial firms. According to Reuters, Citigroup Inc has cut 14,000 jobs this year, while Wachovia plans to cut close to 7,000, affecting almost 6 percent of its staff. For these institutions, and others, the credit crunch has affected lending and mortgage securities. Climbing unemployment will heighten the severity of the credit situation, contributing to additional cuts.

Job losses are also causing a landslide in the housing sector beyond lenders and brokers. Since Feb. 2006, employment in the construction industry has dropped by almost 390,000 jobs, with construction workers and contractors taking the hit. In July and August, losses averaged 14,000 for the sector, while related home building industries lost 7,000 jobs.

Two sectors not seeing losses, however, are healthcare and education, which combined added 55,000 jobs. The Center for Economic and Policy Research (CEPR) predicts their gains will diminish with state and local budget cuts being put into effect.

The number of job losses has also sparked a debate where the minimum wage is concerned, as some worry that an increase will stunt job growth. On the other hand, others argue that a boost in the wage will result in increased spending. Senators John McCain and Barack Obama hold opposing views, respectively.

Nonetheless, experts don’t expect the job situation to improve anytime soon. Created by The Conference Board for data analysis purposes, the Employment Trend Index (ETI) further declined in August to 110.8, for a total decline of 8 percent since a year earlier. The index measures eight indicators, including initial claims for unemployment, percentage of firms with job openings, industrial production and real manufacturing, among others.

“The Employment Trend Index continues to rapidly deteriorate, suggesting there is little likelihood of a turnaround in the job market anytime soon,” said Gad Levanon, Senior Economist for the board, in a press release. “In fact, the pace of decline points deteriorating throughout most of the U.S. with the West South Central region faring better than others.”

Experts seem to agree that job losses will continue to steepen well into 2009 and beyond an economic turnaround, as employers tend to seek higher sales before hiring employees. A recent study, however, offers a silver lining. After predicting a total loss of 700,000 jobs, a published forecast by the University of Michigan implies a gain of 900,000 jobs during 2009 and 2.6 million during 2010, the quickest job growth of any previous recession.