US job growth skids to near halt, recession feared

Summary of News:
WASHINGTON, Jan 4 (Reuters) - U.S. jobs growth skidded to a near-halt in December and the unemployment rate hit a two-year high, according to a government report on Friday that raised recession fears and chances of more interest-rate cuts.

The Labor Department said only 18,000 new non-farm jobs were added last month, the weakest performance since August 2003, while the jobless rate jumped to 5 percent from 4.7 percent in November -- the largest monthly rise since October 2001 in the wake of the Sept. 11 terror attacks.

U.S. central bank was more likely now to cut rates by a half percentage point than a quarter to add stimulus to a clearly flagging economy when it meets at month's end.

"This economy of ours is on a solid foundation, but we can't take economic growth for granted," President George W. Bush said

The jobs data rattled financial markets already fearful about recession. The Dow Jones industrial average .DJI fell 256 points to end at 12,800 and the high tech-laden Nasdaq .IXIC composite index lost 98.03 to 2,504.65.