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Last Updated: Friday, 9 January, 2004, 15:50 GMT
Feeble growth in US jobs market
EURO SOARS AGAINST DOLLAR
When the jobs data were announced at 1330 GMT, the euro soared against the dollar

US bosses took on only 1,000 new workers in December, official figures have shown.

Nonetheless the US jobless rate fell from 5.9% to 5.7%, registering the biggest drop in months, the US Labor Department said.

The statistics show that robust economic growth is still not bringing employment opportunities for ordinary Americans.

Seconds after the news, the euro surged to an all time high against the dollar.

Scrooge bosses at Christmas

The euro leapt to $1.285, a rise of more than one US cent, managing another all-time high against the US currency within days of its record opening to the year.

The Bureau of Labor Statistics said the latest employment data suggested that at least 300,000 people had simply stopped looking for work.

US retailers did not take on extra staff to cover the Christmas rush; instead they cut 38,000 jobs.

The manufacturing sector has been shedding workers for nearly four years, and the trend continued in the December, when industry cut 26,000 posts.

Slow recovery?

Sung Won Sohn, chief economist at Wells Fargo Bank, dubbed the figures "disappointing".

He added: "Business caution is still quite substantial, preventing them from hiring people. The name of the game is productivity and to postpone hiring as long as they can."

Other experts added that the report was evidence that the economic recovery could be slower than previously expected.

They added it also implies lower inflationary pressures which could delay any Federal Reserve plans to tighten rates.

Carl Leahy, senior US economist at Deutsche Bank Securities in New York added: "(Fed Governor) Bernanke has said that the inflation rate is already at or below his comfort level.

"That combined with no job growth makes it harder and harder for the Fed to pull the trigger in an election year."

Political fallout

The news from the jobs market is awkward news for President George W Bush.

His political opponents have accused him of presiding over the largest destruction of jobs since the 1930s.

But during recent months the economy seemed to be at a turning point, with the strong economic growth at last generating new jobs.

The new data, however, suggest that the so-called "jobless recovery" could become a key issue in the 2004 presidential campaign again.




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