Employers added far fewer jobs in December while the unemployment rate shot up to a two-year high, according to a government report Friday that showed a job market much weaker than Wall Street had expected.There was a net gain of 18,000 jobs, down from the revised 115,000 gain reported in November, the Labor Department said. Economists surveyed by Briefing.com had forecast a gain of 70,000 jobs.
The December figure was the weakest one-month gain in jobs since a loss was reported in August 2003.
Stock futures fell sharply on the news, as the report stirred fears about a recession in the year ahead. Investors trading fed funds futures were pricing in a 75 percent chance that the Federal Reserve would move to cut rates by a half percentage point at its Jan. 31 meeting, up from a 67 percent chance of a cut that deep at the close of trading Thursday.
The unemployment rate rose to 5 percent – the highest reading since November 2005 – from a 4.7 percent reading in November. Economists had expected the unemployment rate to creep higher to just 4.8 percent.
The rise was the biggest one-month jump in the unemployment rate since August 2001, when the nation was in a recession. The Labor Department’s household survey, which is separate from the employer survey used to estimate the total number of jobs in the economy, found a jump of 474,000 people who were counted as unemployed, with a comparable drop in the number of Americans reporting they had jobs.
The employer survey found a 49,000 drop in employment in construction, while manufacturing jobs fell by 31,000. But the job losses were not limited to those sectors. Retailers trimmed 24,000 workers in the seasonally-adjusted estimate, as many of them reported weaker-than-hoped December sales ahead of the holiday. 
