The unemployment rate rose to 5.0 percent in December, and payroll employment was essentially unchanged (+18,000) at 138.5 million. In 2007, payroll employment growth averaged 111,000 per month, compared with 189,000 per month in 2006.

In December, job gains continued in professional and technical services, health care, and food services, but were mostly offset by losses elsewhere, particularly in construction and manufacturing. Average hourly earnings increased by 7 cents, which followed a gain of the same amount in November.

Turning to the measures from our survey of households, the unemployment rate rose by 0.3 percentage point in December to 5.0 percent; a year earlier the jobless rate was 4.4 percent. Over the year, unemployment rates increased for nearly all of the major worker groups. The number of unemployed persons grew to 7.7 million in December, up from 6.8 million a year earlier. The household survey contains questions that identify reasons for unemployment, and in December, there were increases in the numbers of unemployed job losers and reentrants to the labor force.

To summarize December's labor market developments, the unemployment rate rose to 5.0 percent; it was 4.4 percent a year earlier. Payroll employment was essentially unchanged in
December. Over the year, 1.3 million jobs were added, compared with 2.3 million in 2006.