Unemployment Rate Continues to Rise

WASHINGTON - Job cuts still loom for American workers despite signs the U.S. economy may be headed for a recovery soon, analysts predicted.

The December employment report released today by the Bureau of Labor Statistics showed that unemployment edged up to 5.8 percent last month despite some economic data that has offered hopeful signs.

The U.S. economy has been in a recession since March, with its woes made worse by the Sept. 11 attacks on the World Trade Center and the Pentagon that damaged consumer psychology and led wary businesses to announce mass layoffs.

Heartened by a spate of upbeat reports lately, economists have grown hopeful that the recession could lift within the next few months.

But in past business cycles, even when the economy emerged from recession, the job market often remained weak. Analysts expect that pattern to hold this time, as firms focus on cost-cutting and continue trimming their payrolls.

Indeed, many economists project that the jobless rate could hit a peak of 6.5 percent sometime around midyear before it starts to head lower again.

Since the start of the recession, the economy has lost close to 1.2 million jobs, with nearly 800,000 after Sept. 11.