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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.
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And I'm Robert Siegel.
All this week, the financial markets were waiting to see what this morning's unemployment report would bring, and the news was not encouraging. Unemployment shot up to an even 5 percent, and the number of jobs created was just 18,000, far less than expected. Investors took a look at the numbers and then sent stock prices down sharply - where they stayed.
NPR's Jim Zarroli reports.
JIM ZARROLI: Over the past year, house prices have fallen, oil has gone through the roof, and Wall Street banks have become mired in the subprime muck. But through it all, there were consolations, and one of them was the low U.S. unemployment rate. This morning's report suggests that the job market is no longer the bright spot it was.
Mr. ROBERT DYE (Senior Economist, PNC Financial Services Group): We were expecting to see a soft number, and this number was very soft.
ZARROLI: Robert Dye, senior economist at PNC Financial Services Group, says there were big declines in construction, manufacturing, and retail employment in December. And, he says, if the job market takes a beating, then consumer spending will be affected, and that is worrisome.
Mr. DYE: We were teetering on the edge of recession, and what I would need to see to sort of put me over that edge would be a continued weak-to-negative job growth in the next couple of months.
ZARROLI: Bad news, like this, is just the sort of thing that can throw a monkey wrench into a political election season, and Democrats were quick to draw attention to it.
Fresh off her disappointing showing in Iowa yesterday, Hillary Clinton appeared at a campaign event in New Hampshire this morning, and the employment report was almost the first thing out of her mouth.
Senator HILLARY CLINTON (Democrat, New York; Presidential Candidate): You know, the way here, I got an e-mail that the jobs report came out. And guess what, unemployment is up. And I predict to you that we are just at the beginning of a very tough economic year.
ZARROLI: That seemed to be the consensus on Wall Street too, and stock prices spent much of the day wallowing in correction territory. The Dow Jones Industrial Average lost nearly 2 percent and the NASDAQ Composite Index had its worst day in nearly a year.
The poor performance seemed to throw the Bush administration on the defensive. The president went ahead with an already scheduled gathering of his economic advisers. Commerce Secretary Carlos Gutierrez did his best to put a positive spin on the news. He said, this report aside, there are still a lot of good things to be said about the U.S. economy right now.
Secretary CARLOS GUTIERREZ (U.S. Department of Commerce): Exports are booming, consumers are buying, and businesses are investing. So the only part of the economy that has been a drag on growth has been residential construction.
ZARROLI: But Gutierrez also said the administration isn't taking today's jobs report lightly.
Sec. GUTIERREZ: We're not complacent and we take this number very seriously and we're constantly looking at ways of keeping the economy strong. We've had a long string of growth, and we want to keep that going.
ZARROLI: Just what the administration might be planning, if anything, isn't clear, but officials said the weak report underscores the dangers of raising taxes. One all but certain result of today's report will be to make another interest rate cut more likely. Federal Reserve policymakers cut rates four times last year in an effort to make money cheaper to borrow and restore some confidence in the financial system. After today's report, they'll be under pressure to do so again.
Jim Zarroli, NPR News, New York.