The construction industry saw the largest overall job loss in a bleak employment picture. that has resulted in the highest unemployment rate in 14 years. The 6.5 percent jobless rate as of October 2008 rose from 4.8 percent a year ago. And, as the table below shows, out of the 2.7 million new jobless workers in the past 12 months, 437,000 came from the construction sector.

The increase in unemployment in construction is one of the consequences of housing crisis, which has resulted in an oversupply of real estate and falling prices.

But other sectors of the economy also have been hard hit, particularly wholesale and retail trade, professional and business services, and manufacturing.

A sharp decrease in consumer spending in the third quarter and the decline of retail sales is the most likely explanation for the increase in unemployment in wholesale and retail trade. Of the 406,000 newly unemployed, the vast majority, some 306,000, came from retail.

The professional and business services sector, which includes accounting, legal, engineering, advertising, managerial, and administrative and support services, contributed 377,000 newly unemployed over the past 12 months.

Manufacturing contributed 278,000 newly unemployed. Among the 185,000 who lost jobs in the durable goods sector, the increase in unemployment is spread approximately evenly among various industries.  But in the non-durable goods sector almost half of 92,000 lost jobs come from food manufacturing.

Education and health services sector contributed an additional 263,000 to the job loss total, of which 112,000 came from educational services and 151,000 came from health care. Further reduction in the educational services sector might follow in the coming months as schools face hiring freezes and a likely shortfall in enrollment because of the financial crisis.

Leisure and hospitality employment is another victim of falling consumer spending. The sector has lost 215, 000 workers. Most of the job loss, some 133,000, comes from the arts, entertainment, and recreation category, which includes performing arts, spectator sports, museums, and recreational activities, including gambling.

The increase in unemployment in transportation and utilities industry comes entirely from the rise in unemployment in transportation.  Within the information sector, the majority of unemployed come from the motion picture and sound recording industries.

Despite the financial crisis and major layoffs at financial institutions, the financial activities sector has contributed only 127,000 newly unemployed in the past year, which is only about 5 percent of the total increase in unemployment. It is likely, however, that this number will climb in coming months as the financial industry restructures.

It is also likely that we have not yet seen the full impact of the financial crisis on unemployment across the board because employment tends to adjust slowly. The coming months might reveal a still grimmer picture.

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