US employers added only 18,000 jobs in December and the national unemployment rate rose to 5 per cent, its highest in more than two years, according to a government report today.
The Labour Department said December's pace of job creation was the weakest since August 2003 when 42,000 jobs were cut.
The unemployment rate jumped to 5 per cent, its highest since it matched that rate in November 2005, from 4.7 per cent in November and led some analysts to predict the economy was on the verge of contraction.
The Federal Reserve is epxected to continue lowering interest rates to counter a slowdown.
The department said that for all of 2007, payroll employment growth averaged 111,000 a month, down from 189,000 a month in 2006. President George W. Bush yesterday said that he was considering stimulus measures to shore up the struggling economy but had not made any decisions. Fed policy-makers meet at the end of this month and are widely expected to cut interest rates again by at least a quarter percentage point.
During December, manufacturing industries shed 31,000 jobs and construction businesses cut another 49,000. There were 31,000 more government jobs and 44,000 were added in education and health services but retail industries cut more than 24,000 jobs.
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