WASHINGTON -- The nation's unemployment rate climbed to a 5 1/2 -year high of 7.1 percent in December, with the bulk of the rise occurring among people discharged from their latest job with little prospect of recall, the Labor Department reported yesterday.
The ranks of those out of work swelled by 289,000, to 8.9 million, the highest in nearly eight years. And the number of people out of work more than six months rose by 148,000, to 1,471,000.
As discouraging as much of the report was, however, many private analysts said it did not point to significant fresh deterioration in the economy last month but mainly reflected a continued lack of growth.
"What it tells you is that the economy is stagnant," said Neal M. Soss, chief economist for First Boston Corp. "There's no sense of improvement."
One relatively bright spot in the report was a modest but unexpected rise in payrolls, which grew by 31,000; analysts had expected payrolls to shrink by more than twice that amount.
All the gain, however, was in government rather than private payrolls. The latter would more accurately reflect economic conditions.
Other pluses were a slight increase in the length of the average workweek, an increase in the proportion of industries adding workers rather than shedding them and a rise in the index of production working hours.
Overall, yesterday's figures appear to have reduced pressure on the Federal Reserve to cut interest rates further, or at least not to have intensified the Fed's concern.
In fact, Federal Reserve Chairman Alan Greenspan told Congress yesterday afternoon that he expected the steep cut in interest rates the Fed ordered last month to be sufficient to get an economic recovery started and that he did not foresee a need for further rate cuts or for budgetary stimulus.
(Mr. Greenspan tried to assure Congress by repeating past statements that the Fed is closely monitoring economic developments and will do more if necessary to spur demand by lowering interest rates, the Associated Press reported.
(However, he resisted efforts by Senate Democrats who tried to extract a specific pledge for more dramatic movements to reduce rates.)
President Bush, returning from his business-oriented trip to the Far East, called the December results disappointing, and congressional Democrats pounced on the report to assert administration mismanagement.
"It is alarming that joblessness is still rising so sharply in the second year of this Republican recession," said House Majority Leader Richard A. Gephardt, D-Mo. "The surge in unemployment shows why the president cannot pose for photo opportunities with the Japanese and cut the capital gains tax for the rich if he wants to get the economy moving again.
"We need a far-reaching program to revive the economy and help middle-income Americans."
From the Senate, Majority Leader George J. Mitchell, D-Maine, said, "Not only is this 19-month-long recession the most prolonged since the Second World War, it's becoming one of the most painful for working, middle-income people."
Rep. David R. Obey, D-Wis., said the higher jobless rate showed that extended jobless benefits should continue at least until autumn.
Yesterday's was the first monthly labor-market tally taken since enactment of legislation under which benefits for about 3.1 million people who have exhausted them since last March have been extended for up to 20 weeks. Normally, the jobless are covered for no more than 26 weeks.
Thomas J. Plewes, an associate Labor commissioner, said he could find no visible effect, such as an increase in workers re-entering the work force or a decline in so-called discouraged workers, that could be traced to the extension.
Although extending benefits may lessen pressure on the jobless to find a job, the existence of the benefits acts as a lure for people to collect them, which requires statements that one is looking for work. Those who are not searching for work are not counted as unemployed.
The new job hunters increased the labor force by 245,000 in December, while 44,000 workers lost their jobs or quit, raising the ranks of the unemployed by 289,000. At 8,891,000, the jobless total is the highest since January 1984, when it was 9,008,000.
Before last month, the unemployment rate had held at about 6.8 percent from May through September before edging up to a revised 6.9 percent in October and November. Various indicators show that a recovery from the recession has now stalled, despite rising gross domestic output for the second and third quarters of 1991.
Since the onset of the recession, the jobless rate has increased 1.7 points and the number of people out of work has risen by 2.1 million.
The December increase in the unemployment rate was the first clear rise since May, since changes of one-tenth of a percent are considered statistically insignificant.
"I find little in this report that would suggest we're coming out of this recession," said Norman Robertson, chief economist for the Mellon Bank in Pittsburgh.
As part of the usual annual recalculation at this time of year, November's rate was revised up to 6.9 percent from the 6.8 percent initially reported.
The rates for September and October were also raised one-tenth of a point, but there were offsetting one-tenth point declines for March, May and June.
The number of people who were laid off or discharged from their last jobs, as opposed to having quit them, rose nearly 300,000 in December, to 4,990,000, the report showed.
Layoffs accounted for only 20 percent of these. Those who left jobs voluntarily fell to 913,000 from 987,000.
Last month, 56.2 percent of idled workers were job "losers," compared with 50.4 percent a year earlier.
The average duration of jobless spells rose to 15.3 weeks from 14.9 weeks. But the proportion, though not the total, of people out of work five weeks or less shrank to 37.1 percent, contracting for the fourth straight month.
This, according to Michael P. Niemira, economist at Mitsubishi Bank, indicates that while it may be hard to find work quickly, "there appears to be some stabilization in the labor markets."
The department's quarterly survey of discouraged workers -- those who have given up the search for work because they think it would be futile -- showed a relatively slight rise of 30,000 during the fall, to 1,094,000. This total is up about 270,000 since the start of the recession but that gain is far below the 700,000 rise in the number of discouraged workers during the 1981-1982 recession.
Although the department's separate survey of households showed 44,000 fewer workers on a seasonally adjusted basis, the number of workers jobs tumbled by 561,000 without the adjustment, the report also showed.
Regionally, unadjusted figures showed the Northeast had the highest rate, at 7.4 percent. The Midwest had the lowest, at 6.5 percent.