Payrolls Barely Rise in Weak Jobs Report
Fri January 9, 2004 01:15 PM ET

By Anna Willard
WASHINGTON (Reuters) - American employers hardly took on any new workers in December, a disappointing government report on Friday said, indicating the economic recovery has yet to translate into sustained jobs growth.

The unemployment rate fell to 5.7 percent, the lowest in over a year and down from 5.9 percent in November. But this was mainly because 309,000 people dropped out of the work force.

The number of workers on U.S. payrolls outside the farm sector in December increased by just 1,000, after a downwardly revised rise of 43,000 in November. It was the fifth consecutive monthly climb but was far below economist expectations for a rise of 130,000.

The poor report is a headache for President Bush as he seeks re-election in November with the economy -- specifically job creation -- expected to be a key issue in the campaign.

But Bush, speaking to a small business forum, was upbeat, saying all economic signs were "very strong." He said the drop in the unemployment rate was a "positive sign" of an improving economy.

Economists disagreed.

"It's a shocker. The one ray of sunshine, the decline in the unemployment rate, is ironically a sign of weakness," said Cary Leahey, senior U.S. economist, Deutsche Bank Securities, New York.

"The only reason it declined is that fewer people were looking for jobs in December."

(exactly what I've been saying all along...)