U.S. jobless rate hits 5 percent;
Culpeper figures forthcoming

WASHINGTON - It's back to the future for President Bush, who in his last year in office is facing the same challenge he did in his first - the possibility of a recession and how to avert it.

Bush couldn't stave off a recession in 2001, but his tax cuts helped to cushion the blow. This time around, a tax cut is under consideration again, the White House said after the release of an especially gloomy employment report Friday.

Wary employers clamped down on hiring and pushed the unemployment rate to a two-year high of 5 percent in December, an ominous sign that the economy may slide into recession.

Gripped by uncertainty, government and private employers last month added the fewest new jobs to their payrolls in more than four years. In fact, employment at private companies alone actually declined.

While the rest of the nation saw an increase in unemployment in December, Culpeper County is still waiting for its November numbers to be released.

According to Peter Mocarski, manager of the Virginia Employment Commission office in Culpeper, the November numbers are usually released on the first day of the month in January, but the holidays have slowed that process.

He's hoping the numbers will be available Monday.

In October, Culpeper had a 3.3 percent unemployment rate, the highest in Planning District 9: Culpeper, Orange, Madison, Rappahannock and Fauquier counties.

The entire planning district had a 2.7 percent rate, one of the lowest in the commonwealth.

October is one of the best months in the district, with a lot of outdoor work being completed, Mocarski said. September was Culpeper County's lowest month of the year with a 3.2 percent rate. November and December are usually helped by retail jobs, but by the first of the year the rates typically climb.

Last year, Culpeper's unemployment stood at 3.8 percent in January and 3.9 percent in February.

"We normally expect January and February numbers to be up," Mocarski said. "We go through this every year. The asphalt paving companies shut down normally the Friday before Christmas and they aim to go back to business around March 15. Usually one asphalt business stays open in case of emergencies."

Mocarski said other construction businesses also see a decrease in work during the January and February months because it's hard to finish projects with the ground freezing and thawing.

The housing crisis has also been causing problems for local building-related industries. Centex Homes abandoned its plans for a high-end seniors-only community in Warrenton recently, an indicator more jobs won't be coming to the area.

The Labor Department's report provided evidence of an economy greatly strained by a housing slump and a credit crunch.

The disappointing employment figures sent Wall Street into a nosedive, thrust the White House into damage control and ratcheted up the blame game as Republicans and Democrats battle for the presidency.

The employment numbers also fanned speculation that the Federal Reserve will have to lower interest rates again. As expected, the Fed took action to make cash more available to banks.

Bush said he is on top of the situation. "We can't take economic growth for granted," he said. "There are signs that will cause us to be ever more diligent and make sure that good policies come out of Washington."

Bush said he wants to work with Congress "to deal with the economic realities of the moment and to assure the American people that we will do everything we can to make sure we remain a prosperous country."

With the odds of a recession increasing, Bush met with his top economic advisers on Friday and was considering the need for an economic stimulation package. The president, who has been plagued by low public approval ratings for his handling of the economy, isn't expected to make any decisions until later this month. Tax cuts are under consideration, White House spokesman Tony Fratto said. "We've done tax cuts before, and it's led to growth," he said.

The State of the Union address is Jan. 28, and Bush is likely to unveil his package then.

The civilian unemployment rate jumped from 4.7 percent in November to 5 percent in December, the highest since November 2005 after the Gulf Coast hurricanes dealt the country a mighty blow. Total payrolls - both private employers and government - grew by just 18,000 last month, the worst showing since August 2003, when the economy suffered job losses as it struggled to recover from the 2001 recession.

"This is a major warning shot that the economy is in trouble," said economist Joel Naroff, president of Naroff Economic Advisors.