Payrolls Tumble 101,000 in December
By Caren Bohan
WASHINGTON (Reuters) - The already troubled U.S. labor
market took a turn for the worse in December as the economy
lost 101,000 jobs -- in contrast to expectations companies
would add workers, the government said on Friday.
The jobs drop was the largest since February, when the
economy lost 165,000 jobs. For 2002 as a whole, the economy
shed a net 181,000 jobs.
Despite the steep drop in payroll employment and a decline
in worker hours in December, the unemployment rate stayed
steady last month at 6 percent, according to the Labor
Department's closely watched employment report.
U.S. bond prices soared on the report and the dollar sank
to a three-year low against the euro.
"It's weaker than expected and I think the only sign of
strength was manufacturing hours were up and overtime was up.
Other than that it's a very soft report, and the previous month
was revised down," said Asha Bangalore, economist at Northern
Trust Co. in Chicago.
The report is likely to complicate efforts by President
Bush to bolster confidence in his handling of the economy. Bush
on Tuesday unveiled an ambitious $674 billion plan to lift the
U.S. economy by scrapping taxes investors pay on dividends and
speeding income tax reductions. The package heads to Congress,
where it is sure to be a subject of heated debate.
December's drop in payrolls outside the farm sector was a
much weaker performance than the 22,000 jobs gain projected by
U.S. economists in a Reuters survey. In a further sign of
weakness, Labor revised its latest report to show an 88,000
drop in payrolls in November, sharper than 40,000 decline it
initially reported.
Last month's job losses were led by the retail sector.
Department stores, toy stores and other retail outlets curbed
hiring amid disappointing sales during the all-important
holiday season, causing a seasonally adjusted 104,000 drop in
retail payrolls.
The ailing manufacturing sector also contributed to the
deterioration, with jobs in that sector falling 65,000. Gains
in government jobs and in some service-sector industries helped
to offset those declines.
The average workweek shrank to 34.1 hours in December from
34.2 hours in November. Average hourly earnings rose 0.3
percent in December after a 0.2 percent rise in November.
10-Jan-2003 13:49:12 GMT
Source RTRS - Reuters News |
