Jobless claims higher than expected
The new job numbers out today from the Labor Department are much worse than economists expected. Janet Babin reports increased unemployment could weigh on consumer confidence and spending.
A job seeker looks at a job listing board in Oakland, Calif. (Justin Sullivan/Getty Images)
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Scott Jagow: I was just saying this week how the job market had been one of the bright spots of the economy lately. Well, it had been. But today, we got the latest report from the Labor Department. Employers only added 18,000 jobs last month. That is a paltry number -- much worse than anticipated. Marketplace's Janet Babin has more from North Carolina Public Radio.
Janet Babin: The Labor Department reports that the unemployment rate hit 5 percent in December, from 4.7 percent the month before. That's the highest number of jobless claims since December of 2005.
Many economists were expecting a weak report, but not this broad-based. The monthly job losses span many different industries and geographic regions.
Mark Zandi with Moody's Economy.com says the numbers could create a negative self-reinforcing cycle. The increased unemployment could weigh on consumer confidence and spending.
Zandi says the Federal Reserve needs to be more aggressive in cutting interest rates. But he says other policymakers need to plan for the worst, too:
Mark Zandi: They need to start thinking about things like a temporary tax cut, more help for hard-pressed homeowners, think about what they can do to shore up this economy in the spring.
Zandi says inaction from government at this point will surely lead to a recession.
I'm Janet Babin for Marketplace.
