A Chequer-Board of Nights and Days

Hiring practically stalled in December, driving the nation's unemployment rate up to a two-year high of 5 percent and fanning fears of a recession.

Employers last month added the fewest new jobs to their payrolls in more than four years, according to the employment report released Friday by the Labor Department. The report showed that employment conditions are deteriorating, strained by a housing slump and credit crunch that are sapping economic strength.

"The economy is getting hit by some body blows. The big question is whether the economy can withstand it or will it take a fall," said Ken Mayland, president of ClearView Economics.

The 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.

On Wall Street, the stocks tumbled. The Dow Jones industrials were down more than 140 points in morning trading.

A 5% unemployment rate is still quite good, but obviously, the trends are troublesome. I think that any recession will be short and shallow but because the relevant economic indicators are lagging, we may not know for some time when the recession finally came to an end. Needless to say, this will play a big role in the Presidential campaign and what once appeared to be a political season that would be devoted to Iraq has instead turned into a political season increasingly devoted to the economy.