The U.S. Labor Department last month announced that the nation lost a net total of 4,000 jobs in August, the first time employment had shrunk since August 2003.

“We did not expect a report as awful as this,” Ian Shepherdson, chief U.S. economist at the consulting firm High Frequency Economics told The Washington Post.

Not surprisingly, the slumping housing market took a big employment hit. The Labor Department reported that 22,000 people in the construction business lost their jobs in August. The number puts the building sector 96,000 off its peak of September 2006.

The dip in construction jobs across the Southwest Sun Belt, a key pool market, were especially steep. The Arizona Department of Economic Security is predicting 14,500 job losses in construction through 2008.

“It’s clear now that the industry is decelerating and paring down,” said Don Wehbey, senior economist at the Arizona Department of Economic Security. “Where we are is clearly a downward cycle. We didn’t see the bottoming out like this six months ago.”

Edward Fletcher of Paddock Pool Construction Co. in Scottsdale, Ariz., estimated that business statewide is down approximately 40 percent this year.

“It’s not like it was in 2006 and several years before, said Fletcher, the vice president of commercial projects at the Pool & Spa News Top Builder.

The economic forecast for California, meanwhile, is no better. The UCLA Anderson Forecast expects construction payrolls in the Golden State to be trimmed.

“Overall, our forecast is that California is in for at least another year of these economic doldrums, with rising unemployment, weak job growth and a slowdown in all broad indicators,” stated the latest report, which was released in September.

Economist Ryan Ratcliff, author of the UCLA report, predicted this fall’s construction woes in July, when he warned that the U.S. economy wasn’t slipping into recession yet, “but it is close.” The Anderson Forecast stated that the American economy is going through a “near recession experience.”

The latest spate of discouraging economic news has put employers into a holding pattern. A September survey by Milwaukee-based Manpower Inc. shows that 58 percent of employers expect no change in hiring from now until the end of the year.

The quarterly survey, which has been conducted since 1962, shows flat or dropping job numbers in construction, finance, retail and education services.

Brent Rakers, a stock analyst with Morgan Keegan & Co. in Memphis, Tenn., said “there is a good deal of uncertainty” about the strength of the economy in the minds of consumers, investors and businesses.

“The consumer is more tentative right now,” said Rakers, who counts watching the pool industry as one of his areas of expertise. “As we go into next year, if we get into a more stable housing market, consumers can focus again on home improvement.”