Jobs outlook worsens

NEW YORK (CNNMoney.com) -- The battered labor market is suffering its worst conditions in four years and has not hit bottom, according to a report issued Monday by a leading business research organization.

The Conference Board's Employment Trends Index, which combines a number of readings on jobs and unemployment, fell to 112.1, down 0.9 percent from June.

"This economy remains too weak to stem the monthly loss in jobs," said Gad Levanon, senior economist at the Conference Board. "Unless the labor market turns around soon, unemployment could pass 6% in early 2009 and the [index] isn't signaling any such improvement around the corner."

On Friday, the Labor Department's July jobs report showed unemployment at 5.7%, a four-year high, as well as the seventh-straight month of net job losses for the economy.

The index reading for June was revised up to show a slight gain from May. But the gain was limited to only a few of the eight components that make up the index. For a rise in the index to signal a turnaround in the employment outlook, it needs to be broad based and sustained. The 0.4% rise in June reading was neither.

Levanon points out that all eight components of the index are now much weaker than year-ago levels. The most pronounced declines are in the drop in temporary employees, and a rise in those working part time who would prefer full-time work.

The government report issued Friday showed a net loss of 468,000 in the first seven months of the year. While the unemployment rate was 5.7%, that excludes those workers who have become discouraged from looking for work or those who are only able to find part-time jobs when they want full-time positions.

When the government includes those workers in its count, it's so-called underemployment rate hit 10.3% in July, the first time it has topped 10% in five years.