Unemployment claims climb to 5%

Growth in U.S. payrolls slowed to a trickle and the unemployment rate increased significantly in December, according to a report from the Department of Labor. U.S. payrolls increased by a miniscule 18,000 jobs in December, marking the fewest jobs added since August 2003, when payrolls shed 42,000 jobs. Meanwhile, the unemployment rate climbed to 5% in December from a reading of 4.7% in November. The increase was the largest since the unemployment rate grew by 0.5% to 5.4% in October 2001, following the 9/11 terrorist attacks. In December, the number of construction jobs fell by 49,000, while the number of manufacturing positions decreased by 31,000 and mortgage lenders cut 7,000 jobs. Payrolls for 2007 grew by an average 111,000 positions per month, down from 189,000 per month in 2006. Average hourly earnings rose 3.7% last year, below the 4.3% increase recorded in 2006. The data was released one day after the monthly ADP National Employment Report reported that 40,000 private sector jobs were added in December.