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Bob Moon: And as of today, all bets are off.

The government’s report of weak job growth last month has changed the outlook of many economists.

Up to now, the number of new jobs have been growing at a relatively healthy rate and experts have been relieved that that was giving us some economic wiggle room, but now the job market has tightened up.

Unemployment hit a two-year high last month and the debate today focused on whether it may be too late to head off a recession.

Marketplace’s Janet Babin reports from North Carolina Public Radio.

Janet Babin: The Labor Department says the unemployment rate hit 5 percent in December. That’s the highest number of jobless claims since December of 2005. Back then, the nation was recovering from Hurricanes Rita and Katrina.

This new report is packing the punch of a hurricane in some financial circles. Mark Zandi is chief economist at Moody’s Economy.com. Like most of his peers, he was expecting weak numbers, but he was blown away by the job losses that hit diverse industries and regions.

Mark Zandi: No way to put any sugar coating on this. The economy is, if not in recession, pretty darn close.

Zandi says the subprime mortgage mess and subsequent credit crunch may be catching up with us.

He says the Federal Reserve needs to be more aggressive and cut interest rates by a half-percent.

But that may be too little too late.

Michael Englund is with Action Economics. He fears the jobless figures could create a negative self-reinforcing cycle. He says that cycle may already be affecting the Gross Domestic Product or GDP:

Michael Englund: Most of the slowdown in GDP up till now probably doesn’t reflect reduced demand for goods, it reflects increased caution by business managers who fear we’re going into a downturn.

But not everyone believes these jobless numbers signal doom for the economy.

Richard DeKaser is chief economist with National City Corporation:

Richard DeKaser: I don’t think a recession’s in the cards for 2008.

DeKaser says the main reason for the downturn is the housing sector. He says that’s likely to stabilize and improve later this year. And that might be enough to help us sidestep a recession.

I’m Janet Babin for Marketplace.