The U.S. economy unexpectedly shed 4,000 jobs in August, substantially below its previous 100,000-job gain consensus estimate, the U.S. Labor Department announced Friday.

The August decrease represented the first time in four years that the U.S. economy shed jobs, as measured by the monthly statistic, and it provided another datapoint for economists and analysts who argue that the U.S. economy is headed toward a recession. That fact also reinforced the belief among many economists that the U.S. Federal Reserve will cut short-term interest rates by at least 25 basis point, or 1/4 percentage point, at its September meeting later this month.

Further, the consensus in financial circles is that the U.S. economy has slowed substantially, and may in fact have slowed to anemic levels -- full-year GDP growth below 1.5%. The latter conclusion is supported by the fact July's job gain was revised to 68,000 jobs created -- a July gain that is smaller than was previously reported.

Wall Street's initial reaction Friday was not favorable: at mid-day the Dow was down more than 175 points to 13,185; the NASDAQ was down 44 points to 2,569. Meanwhile, the 10-year U.S. Treasury soared on the belief the Fed would cut rates, with the 10-year yield dropping to 4.38%.

For many analysts, August's job statistic represents another economic "highway traffic signal" indicating that economic growth is slowing to near-crawl levels. These analysts point to sluggish consumer spending, the housing sector correction, tightening credit markets prompted by subprime defaults, and an increase in mortgage delinquencies, in general, as ample evidence of (at minimum) a slowing U.S. economy.