Unemployment Rate Rises to 7.2 Percent

WASHINGTON (Reuters) – Employers slashed payrolls by 524,000 in December, driving the unemployment rate to its highest level in almost 16 years, a government report showed on Friday, suggesting that the year-long recession was deepening.

The Labor Department said the national unemployment rate rose to 7.2 percent in December, the highest level since January 1993. The jobless rate was 6.8 percent in November.

Analysts polled by Reuters predicted a reduction of 550,000 jobs in December. November’s job losses were revised to show a cut of 584,000, previously reported as a 533,000 loss, while October’s losses were revised to 423,000 from a decline of 320,000. With those revisions, the total reduction in U.S. nonfarm payrolls in the four months through December was 1.9 million.

The largest number of job losses in December was in services-providing businesses, which shed 273,000 jobs.

Total job losses for 2008 was 2.6 million, the largest decline since a 2.750 million drop in 1945.

(Reporting by Lucia Mutikani, Editing by Andrea Ricci)