Hardest hit again was manufacturing sector, which has lost about 150,000 jobs over the past two months and more than 3 million since 2001.
Overall, the unemployment rate jumped for the second straight month to 6.5 percent, the highest in 14 years.
The report underscores some economists' predictions that unemployment could reach eight percent early next year. Job losses, declining incomes, higher rates of debt, and tightened credit markets led to the highest drop in more than two decades in consumer spending over the past quarter. Lower consumer spending, government data revealed late last month, precipitated a contraction in the economy of 0.3 percent.
As unemployment continues to rise, economists expect no reversal in the trend on consumer spending or in the direction of the economy.
Jared Bernstein, head of the Economic Policy Institute, told reporters recently that current conditions require a "demand-side" approach to economic stimulus. Demand-side economics refers to the type of government intervention aimed at providing direct financial relief to working families through targeted tax cuts, boosting the social safety net, and creating jobs through public investments in infrastructure rebuilding.
By contrast, George W. Bush's economic polices of government intervention to provide tax benefits and subsidies to large corporations and the wealthiest people is referred to as "supple-side" or "trickle-down" economics. These policies have notoriously failed to forestall the looming recession and have contributed instead to its likely depth and length.
President-elect Barack Obama emphasized demand-side economic solutions during his campaign.
Congress is currently considering moving into a lame-duck session to pass an economic stimulus package that contains demand-side policies, but so far congressional Republicans have refused to signal their support.
