Bloomberg News
WASHINGTON The economy added fewer jobs than expected in December as nongovernment payroll growth slowed to a four-month low and factories curtailed production, according to a Labor Department report released Friday.
Private companies created 49,000 jobs, fewer than half the 111,000 added in November, according to the report. The number of new jobs was the lowest since August. Manufacturing jobs fell for the fifth straight month, and retailers added workers at less than a fifth of the rate of the 1999 holiday season.
It shows the economy did lose quite a bit of momentum at the end of the year, said Bruce Kasman, an economist at J.P. Morgan Securities in New York. You clearly see signs of substantial slowing in the economy through the labor market.
Last week several companies, including the Internet retailer Etoys Inc. and Sears, Roebuck and Co., the countrys largest department-store chain, announced job cuts amid weaker than expected sales.
The Labor Department report followed a surprise rate cut Wednesday by Federal Reserve policymakers, who expressed concern about weakness in the economy.
Unemployment unexpectedly remained unchanged at 4% in December, still close to the 30-year low of 3.9% set earlier in the year. Including government positions, 105,000 jobs were added in December, less than the 113,000 expected by analysts.
Some analysts said that fact suggests that the economy is not cooling too much.
Yes, we have an economic slowdown, said Joel Naroff, president of Naroff Economic Advisors in Holland, Pa. No, it does not appear that we are headed into a recession.
