Six Months of Job Loss Push Economy Toward Recession

438,000 jobs were lost in 2008

July 3, 2008— -- It's not just employees who are feeling the squeeze from America's deteriorating economy. Employers are too To cope with falling revenues and risings costs, companies have resorted to cutting jobs, hours and paychecks. Employee's weekly take home pay is up just 2.8 percent over last year, which does not keep pace with inflation or the price of gas.

While economists debate whether or not we are officially in a recession, the number of jobs created has now dropped for the sixth consecutive month, a benchmark some economists use to declare a recession is under way.

A report released by the Department of Labor Thursday highlighted the country's weak economic state. There are now 8.5 million Americans out of work, and 62,000 jobs have been cut. Unemployment levels are at 5.5 percent.

The economy has lost a total of 438,000 jobs so far this year.

But economists say these figures don't offer a comprehensive picture of what is taking place; the numbers ignore the growing number of Americans who now work part-time because they cannot find a full-time job.

We found some people who can now only find part-time work.

"I was making $2,000 a month, said Valerie, a women in Philadelphia who asked that her last name not be used. " Now, well, I don't want to say ... significantly less," she said.

The number of workers wanting full-time work but only finding part-time work is rising, according to the National Employment Law Project Analysis of Labor Department Data.

If you factor in these underemployed workers and discouraged workers, who are not counted in the report, the Labor Department said total unemployment jumps from 5.5 percent to 9.9 percent.

Jared Bernstein, an economist at the Economic Policy Institute in Washington, finds the latter number more reflective of the country's current economic state.

"That actually right now is a better indicator of how just how weak this job market is," he said.

Employers are not just cutting jobs. They're also cutting hours and paychecks at a time when Americans are dealing with the rising cost of gas. While weekly earnings in the past year are up less than 3 percent, a gallon of gas is up 39 percent.

"Paychecks are decisively not keeping up with the cost of living," Bernstein said.

Thursday's report also revealed a growing gender divide in the job market. Men have been hit harder than women, perhaps because two sectors of the job market that have been hardest hit, manufacturing and construction, have a greater number of men than women employees. As many as 70 percent of manufacturing jobs and 88 percent of construction jobs were lost this year alone.

David Marin told ABC News he was laid off from his demolition job two weeks ago and worries about finding one to replace it. Even if you are a skilled electrician or carpenter , there is hardly any place for you in the job market, said Marin.

Despite these dismal numbers, there is hope. Jobs in sectors such as education, health care services, leisure and hospitality, as well as government are on the rise. Valerie told ABC News that she was considering a full-time job in the health care industry, which is dominated by women workers and might be a bright spot in the job market.