New figures show that the US unemployment rate jumped to a five-year high of 6.1% last month as 84,000 jobs were slashed.
The Labor Department report - considered one of the best indicators of US economic health - marked the eighth consecutive month of shrinking employment figures, and was worse than economists had expected.
The department also raised its estimates for the previous two months to show a loss of 60,000 positions in July and 100,000 in June, up from earlier estimates of a drop of 51,000 in each of the two months.
The latest figures show a cumulative loss of 605,000 US jobs since the start of 2008, highlighting the effect on the world's largest economy of a housing slump and credit squeeze.
The report suggests a struggling economy in which employers are cutting more jobs and reluctant to hire because of weak consumer and business confidence.
Among various sectors, manufacturing shed 61,000 jobs and construction employment dropped by 8,000. The service sector lost 27,000 jobs.
