The December employment report issued on January 4 showed the weakest job growth since August of 2003, with only 18,000 jobs added in the entire non-farm jobs area and unemployment shooting up to 5 percent. Though economists had expected an increase of 58,000 jobs, the lion’s share of the job losses were (not surprisingly) in construction and in related manufacturing — a byproduct of the mortgage crises, explains Jeff Testerman, vice president of BrokerHunter.com.
With this evidence of a slowing economy, some economists are predicting a recession in 2008, while others insist we are already in one. This puts pressure on the Federal Reserve to lower interest rates; however, troublesome inflationary worries caused by rising oil and commodity prices and a falling dollar make future rate cuts more problematic.
The securities-industry sector lost 3,000 jobs in December, according to Testerman, and that’s the biggest drop in jobs in nearly four years. December’s employment report brought the 2007 results down to a growth rate for the industry of about 2.7 percent — the weakest growth for the industry since 2005. In insurance, job growth actually increased by nearly 4,000 jobs.