Recession fears

The job market took a serious and unexpected turn for the worse last month, raising the risk of a recession and putting added pressure on the Federal Reserve to move more aggressively to keep the ailing housing industry from infecting the rest of the economy.New York Times in the Daily News..

The Labor Department reported Friday that 4,000 jobs were lost from July to August, and the deepest cuts were in industries connected to the housing market, such as construction and manufacturing. It was the first employment decline since 2003, when the job market was still struggling to emerge from the slump after the 2001 recession.

The jobs report all but guarantees that the Fed will cut its benchmark short-term interest rate when its policy-making committee next meets, Sept. 18. A quarter-point reduction, to 5 percent, remains the most likely move, although a half-point cut should not ruled out, economists said.