Analyst: Unemployment Figures Not Yet Pointing to Recession

Unemployment hit a two-year high of 5 percent in December, raising questions of whether the hiring boom of the past several years is eroding because of the severe hits to the mortgage lending industry, a jittery stock market and record-high petroleum prices.

Statistics released Friday, January 4, by the Bureau of Labor Statistics took economists by surprise. Many had predicted a slight increase in unemployment from 4.7 percent to 4.8 percent for the last month of 2007, when in fact the figure jumped to 5 percent.

It’s be too early to tell whether December’s unemployment figure represents the onset of a recession, says Mark Mehler, principal at CareerXroads, a recruiting consultancy in Kendall Park, New Jersey.

Mehler sees large corporations still hunting for corporate recruiters, which means hiring plans are likely under way during the first quarter.

“I haven’t seen a drop in the demand for corporate recruiters,” he notes. “That bodes well because it is one of the key signs to watch for in a weakening economy.”

Jobs were added in certain sectors—33,000 in the area of professional and technical services as well as 28,000 in health care. Those gains, however, were offset by losses in other industries, such as construction and manufacturing.

—Gina Ruiz