While the Canadian jobs report was mixed and mild, the U.S. jobs report is unambiguously lousy, blowing away economists’ expectations.

The United States economy shed 113,000 jobs outside the farm sector in August.

The beleaguered U.S. manufacturing sector lost 141,000 during the month. This was more than double than consensus estimates.

The cuts delivered a much bigger than expected jump in the jobless rate to 4.9%, a four-year high. Average hourly earnings rose an as-expected 0.3%, to stand 4.2% higher year-on-year.

“Mounting job losses in manufacturing threaten to derail consumer spending, the last line of defense against a U.S. recession,” says CIBC World Markets. “The American labour market data were so obviously weak in August that an analytical commentary is almost unnecessary. Indeed, one headline might suffice: the unemployment rate surged to 4.9% as the household survey showed the loss of nearly a million jobs and only an increase in the numbers not looking for work held the rate below 5%.”

CIBC now says that even its 1.5% growth forecast for the third quarter may have been too optimistic. “We’ll have to see further figures on consumer spending, exports, and manufacturing output, but the odds of another zero or even negative quarter are mounting. The data is certainly consistent with the revised outlook for the Fed we published earlier in the week, which sees the funds rate headed for 2.75% by year end.”

BMO Nesbitt Burns concludes, “The Federal Reserve will find absolutely nothing in this report to end to their easing cycle. Rather, fed funds seem headed below 3% from the current 3.5%.”