Next-day article on the June 6, 2006 Employment Report by Edmund Andrews:
U.S. Gains 108,000 More Jobs, but Pace of Growth Slows - New York Times: January 6, 2006 By EDMUND L. ANDREWS
WASHINGTON, Jan. 6 - The United States continued to generate new jobs at a strong pace through the end of 2005 as the unemployment rate edged down to 4.9 percent in December, the Labor Department reported today.
The government estimated that the nation added 108,000 jobs in December, significantly less than most forecasters had expected. But it also said that the nation added far more jobs in November - 305,000 - than it had estimated last month.
Taken together, the new jobs created over the past two months allowed the United States to end the year with about two million more jobs than it had 12 months earlier.
President Bush and other top administration officials immediately incorporated the news into a broader campaign today to promote their economic track record and Mr. Bush's effort to permanently extend and expand on his tax cuts of the past five years.
"These tax cuts make a real difference in the lives of those who work hard in this country," Mr. Bush said in a speech before the Economic Club of Chicago today. "By cutting taxes on income, we helped create jobs."
The president added, "To keep this economy growing, to keep the entrepreneurial spirit alive, to make sure that the United States of America is the most productive nation in the world, the United States Congress must make the tax cuts permanent."
Along with Mr. Bush, Vice President Dick Cheney and other administration officials fanned out across the country today to promote what they view as their underappreciated success on economic policy. At a Harley-Davidson motorcycle plant in Kansas City, Mo., Mr. Cheney asserted, "The president's strategy of cutting taxes delivered the pro-growth results we expected."
But while economic growth and job creation were robust last year, despite the mammoth destruction of Hurricane Katrina and soaring energy prices, analysts say Mr. Bush's policies played a relatively small role.
Most forecasters predict that economic growth will continue at a respectable pace through 2006, though many also predict that the pace will be slower and caution that there are some major uncertainties.
Perhaps the biggest uncertainty is about the housing market, which has expanded at an explosive pace for the past several years as a result of extremely low interest rates. With mortgage rates now climbing and homebuyers less confident that house prices will keep rising, demand is expected to slow and homeowners could sharply scale back on home-equity loans.
Investors reacted warily to the data on employment. Bond prices slipped and the yield on the 10-year Treasury note rose moderately, as investors worried that the Federal Reserve might raise interest rates more than they had expected in order to prevent the economy from overheating.
The dollar dropped against the euro and the Japanese yen, an unusual response in the face of strong economic news.
But the new unemployment data provided mixed signals about the economy's underlying strength.
Retailers shed 15,600 jobs in December, despite the yearend holiday shopping rush, the Labor Department reported. Over all, employment at department stores and other general merchandise retailers was down, the government said, because seasonal hiring was lower than usual and the industry's overall employment has been "trending down."
Employment at construction companies declined by 9,000 jobs, the biggest drop in that category since February 2003 and a possible indicator of a retrenchment in the home-building market.
In contrast to the 108,000 new jobs reported outside the farming sector in December, Wall Street had been expecting the nation to add about 200,000 jobs last month. But November's job growth of 305,000 was revised upward from the initial report of 215,000 new jobs.
The unemployment rate edged down from 5.0 percent in November to 4.9 percent in December. But that decline had little to do with the comparatively small addition of new jobs. Rather, it stemmed from the fact that more people dropped out of the work force.
The unemployment rate has ranged from 4.9 percent to 5.1 percent since last March.