O'Brien: Jobless numbers reflect year's early layoffs, sagging profits

CNN financial news correspondent Tim O'Brien

The U.S. unemployment rate rose to 4.9 percent in August, its highest level in four years, the government reported Friday. Tim O'Brien, a CNN financial news correspondent based in Washington, discusses the repercussions.

Q: What are the reasons for this rise in unemployment?

O'Brien: The unemployment rate is what economists call a "lag indicator" -- which means it is more an indication of where we have been than where we are going. And there is no mistaking the economy has not been in good straits this year. The unemployment we see in August reflects sagging corporate profits in the early part of the year. Companies have had to lay off employees to cut costs, and those layoffs and other employment cuts -- which may have been announced months ago -- are now beginning to take effect.

Q: Should people who have recently been laid off be worried that they won't be able to find employment?

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O'Brien: Maybe in the short run. No one knows how long the current downturn in the economy will last. But eventually the economy will turn around -- it always does. Employment will pick up, and job opportunities will be much more plentiful. The most important thing now is to maintain hope and, if possible, enjoy the leisure time that might not last as long as one might think.

Q: Which types of workers are more at risk for layoffs?

O'Brien: Right now it's the people in high-tech firms such as the dot-coms that offered the greatest rewards a few years ago. As is often the case, the opportunities with the prospect of great rewards also carried the great risks.

Q: Are people really out there looking for jobs and can't find one?

O'Brien: Many people are having to take lesser jobs than they once had, and yes, many people are sending out hundreds of resumes a month. Most go unanswered, and for some people in unique industries, finding work is indeed very difficult.