US domestic employment drops: report

WASHINGTON: US domestic employment fell for the first time since 2003, with drops in the construction and manufacturing payrolls in what is seen as an indication of the recession in the housing market impacting the larger American economy, the Labour Department has said.

Analysts believe that this report by the department will put pressure on the Federal Reserve to aggressively cut interest rates, starting with its policy meeting on September 18.

The Labour Department said today that non-farm payrolls fell 4,000 in August, the first decline since August 2003; but the unemployment rate, however, was unchanged last month at 4.6 per cent.

Hiring last month in goods producing industries fell by 64,000. Within this group, manufacturing firms cut 46,000 jobs; and construction employment was down by 22,000, it said.

According to figures cited in the on line edition of The Wall Street Journal, service-sector employment rose just by 60,000, its slowest pace since October 2005; retail rose by 12,500.

Business and professional services companies' payrolls rose by 6,000. Education and health services employment, in contrast, swelled by 63,000. Leisure and hospitality rose by 12,000, while the government shed 28,000 jobs, it was pointed out.