WASHINGTON — Posting the first nationwide job loss in four years, U.S. employers cut a seasonally adjusted 4,000 positions in August, undermining one of the key supports for consumer spending.
In the apparel industry, specialty stores beefed up payrolls and department stores cut head count, the Department of Labor reported on Friday.
The construction area was hit hard by the housing slump, and manufacturers also suffered declines, including a loss of 6,800 jobs among domestic apparel and textile producers. In addition, overall job growth in June and July was not as robust as first thought, and the figures were revised downward by 81,000 to growth of 137,000 new positions for the two months.
The unemployment rate held steady at 4.6 percent last month.
The weakened employment picture generated fears on Wall Street that the economy could be headed toward a recession. The Dow Jones Industrial Average fell 1.9 percent to 13,113.38, the Standard & Poor's 500 Index dropped 1.7 percent to 1,453.55 and the Nasdaq fell 1.9 percent to 2,565.7.
The job slump might also entice the Federal Reserve Board to bring its benchmark federal funds interest rate down from 5.25 percent in order to stimulate growth by increasing access to credit. The Fed is to meet on Sept. 18, but a reduction could come sooner.
"The economy is much more vulnerable than we may have thought," said Michael Niemira, chief economist for the International Council of Shopping Centers.
Although August same-stores sales beat Wall Street estimates — Niemira said chain stores posted a collective 2.9 percent rise — stores might be facing trouble ahead. Retailers have cut prices and offered discounts to spur business, which could cut into profits.
"The industry has to be even more mindful of their marketing strategy," Niemira said. "They need to think like a recession environment exists whether it happens or not."
Price, which is already a major driver of shopping trends, is going to become even more important, he said. The next few months might prove to be difficult, especially as the impact of the credit squeeze on Wall Street and the meltdown of the subprime mortgage market cycle is felt throughout the economy.
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