There's a good reason that stocks have been dropping like lead weights in recent months:

The U.S. economy is weakening as consumers are spending less, and that is leading to more job losses and less spending.

And so recession creates a vicious cycle.

Everything starts with jobs, and we were able to take the latest pulse last week.

It looked pretty soft at first glance, and the more I look at it, the worse it appears.

As always, I depend on some help from independent employment analyst Philippa Dunne for interpretation of the numbers.

• June's loss of 62,000 jobs was boosted by a rather surprising jump in government employment, which was up by 29,000. Private sector employment was off by 91,000. Goods manufacturing was the worst with construction down 43,000 and manufacturing off 33,000. Temp employment, which provides a guide to the future, was off 30,000 jobs and is now off 7% year over year. Dunne calls that "an unambiguously recessionary number."



• Up were healthcare, by 15,000 jobs, and bars and restaurants, by 16,000 jobs.



• Revisions to the two prior months totaled -52,000. Dunne notes we've now had an unusual five consecutive months of downward revisions to the first print, a streak usually found only in recessions or their jobless aftermath.



• Average hourly earnings were up 0.3%. The yearly gain is now 3.4%, down 0.3 points from the beginning of the year and well below inflation. That's not good news for retail spending, especially since the other source of funds in the mid-1990s—home refinancing—has dried up. Without the tax rebates, Dunne observes correctly that retail would be very weak indeed.

These are not the kinds of numbers you'd see in a classic recession of the past when it was not uncommon to see the loss of 300,000 jobs in a single month.

But we've now had…