Low Dec job growth numbers point to Fed cut, heighten recession fears

01.04.08

WASHINGTON (Thomson Financial) - Low December job growth numbers have solidified economists' expectations of further Federal Reserve rate cuts and heighten recessionary fears.

According to the report released today by the Department of Labor, the economy added just 18,000 jobs in December, sharply lower than the 70,000 jobs economists polled by Thomson's IFR Markets had expected from the survey of employer payrolls. That's the smallest monthly gain since August 2003, the low point of job creation when the economy lost 42,000 jobs.

December's gain is far below the 111,000 average monthly gain in 2007 and just a fraction of the 100,000 jobs the economy needs to keep up with new entrants to the workforce.

The unemployment rate, taken from a separate survey of households, jumped to 5.0 pct in December, the highest rate since November 2005 and higher than the 4.8 expected by economists.

http://www.forbes.com/markets/feeds/afx/2008/01/04/afx4494998.html