Most of the really alarming data has related to the manufacturing sector, which clearly is slumping. But since it only accounts for about 15 percent of total employment, it isn't dragging everything else down.
The good news for workers is that productivity growth cannot continue at this pace. Demand will translate into jobs very soon, and in fact I think it's happening right now.
The Greenspan Fed has inaction down to a fine art. They stood by through much of the late 1990s, allowing a very beneficial reduction in unemployment without suffering any inflationary consequences. When they do have to move, they do so quickly and surgically.
By mid to late October, you're getting into the fourth quarter, and people are starting to look at their year-end results and deciding whether they can bail out now and still look good for the year. That's going to be as true now as it was (in 1987).
Sooner or later rates will have to come back up to at least a 'neutral' level. But for now they've got the monetary policy lever just about where they want it, and it makes sense to do as little as possible for as long as possible.
Looking ahead beyond the current gloom, there is a serious risk that we already have inflationary forces baked into the system. By late spring, the Fed could be cranking up interest rates even faster than they cut them.