U.S. Jobless Rate Rises to 2-Year High at 5 Percent

by John Henry  on Friday, Jan. 4, 2008 10:30 am  

The U.S. unemployment rate rose to 5 percent in December - a two-year high - as hiring came to a near standstill, raising fears that the economic slowdown could head into a recession.

The Labor Department's Bureau of Labor Statistics said employers added only 18,000 jobs to their payrolls, far below economists' forecasts of 70,000, and November's 115,000 figure. It's the lowest rate of job creation since August 2003.

The unemployment rate was up from 4.7 percent in November.

Unemployment figures for Arkansas will be released later this month.

The poor national data also raises expectations of a fourth straight cut in interest rates by the Federal Reserve when it meets to decide monetary policy on Jan. 29-30

The number of unemployed increased by 474,000 to 7.7 million in December. A year earlier, the number of unemployed persons was 6.8 million, and the jobless rate was 4.4 percent.

In December, job growth continued in professional and technical services, health care, and food services, while employment in construction and manufacturing continued to decline. The retail trade and information industries also lost jobs over the month.    

Employment in professional and technical services was up by 33,000 in December and by 322,000 over the year. Architectural and engineering services added 8,000 jobs and management and technical consulting services added 12,000.

The health care industry gained 28,000 jobs in December, bringing its yearly gain to 381,000 jobs. Employment in food services continued to expand over the month with a gain of 27,000. Over the year, the food services industry has added 304,000 jobs. The gains in health care and food services combined accounted for about two-thirds of all private sector job growth in 2007.

Construction fell by 49,000 jobs in December. Since its peak in September 2006, construction employment has fallen by 236,000, with the residential components accounting for the decline.

Financial activities lost 7,000 jobs in December and 79,000 since the industry's peak in February 2007.

Manufacturing employment fell by another 31,000 jobs in December with motor vehicles and parts losing 6,000, wood products 4,000, electrical equipment and appliances 3,000, and textile mills 2,000. Factory employment has declined by 212,000 over the past year.

Average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls rose by 7 cents, or 0.4 percent, in December to $17.71, seasonally adjusted. Average weekly earnings also grew by 0.4 percent in December to $598.60. Over the year, average hourly earnings rose by 3.7 percent, and weekly earnings rose by 3.4 percent.

 

 

 

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