The unemployment figures reported in yesterday's editions were for January, not December. (Published 2/7/88)

The growth in the number of new jobs declined sharply in December, the Labor Department said yesterday, giving a strong sign to many economists that the U.S. economy has slowed down.

While the nation's unemployment rate remained steady at a 10-year low of 5.8 percent, the number of unemployed rose for the first time since October, an increase of 68,000 to slightly more than 7 million Americans.

The creation of 105,000 jobs in December was the smallest increase in 19 months and about one-quarter of the average growth of 400,000 jobs a month for the last quarter of 1987, the government reported. Manufacturing employment, which had been registering gains of about 70,000 jobs a month recently, grew by 25,000.

The payroll survey of businesses is considered a highly reliable harbinger of economic trends. A companion survey of households showed greater employment strength, with a record 62 percent of the population at work.

The White House focused on the continued high levels of overtime hours in manufacturing, which spokesman Marlin Fitzwater said "confirms that the longest peacetime expansion in U.S. history continues into its 62nd month."

That view was echoed by Richard Rahn, vice president and chief economist of the U.S. Chamber of Commerce, who said the figures show "that the economy continues to grow at a moderate pace.

"The first half of 1988 should see a continued rise in employment, a stable unemployment rate and moderate economic growth of about 2 percent. The economy will then pick up steam, growing by over 3 percent in the third and fourth quarters," he continued.

Other economists took a less optimistic view. "We do see a slackening of job creation in the first half of the year with no growth in the economy as a result of a buildup in inventory in the last quarter of 1987," said Sara Johnson of Data Resources Inc., an economic consulting firm.

She said the leveling off of the unemployment rate at 5.8 percent "suggests that {the unemployment rate has} hit bottom and is likely to be edging upward in the next few months."

Lawrence Chimerine, president of the Wefa Group of economic consultants, called the slowdown in the creation of jobs "a key number" that was "consistent with the slowdown in the economy now under way."

"I think we are going to see weak job growth for several more months and perhaps for most of the year" with "modest increases" in the unemployment rate, he said. "There may even be a recession."

One of the brightest spots in the report was the strong performance of industries that are experiencing a strong growth in their overseas sales, such as machinery and electrical equipment manufacturers. They added 21,000 jobs to their payrolls last month. But these gains were balanced against losses of 2,000 jobs in the steel industry, 8,000 jobs in the auto industry and 50,000 jobs in construction.

"The strength of exports is cushioning the economy from a recession," Johnson said.

Another bright spot was retail trade, where the number of jobs grew by 155,000. Janet L. Norwood, commissioner of the Bureau of Labor Statistics, said that may have occurred because retailers retained more of their Christmas staff after the holidays than usual because of labor shortages in some areas.