WASHINGTON — Job growth nationwide fell to the slowest pace in eight years with auto plants and other factories shedding thousands of workers in December — sending stock investors fleeing.

        While the unemployment rate remained frozen at 4 percent, analysts predicted sharply higher numbers in the months ahead as the weak economy forces more layoffs.

        The Labor Department's unemployment report Friday mirrored other statistics that have depicted an economy quickly losing altitude, raising concerns that the record 10-year-stretch of uninterrupted growth could be in jeopardy.

        Private payrolls edged up by just 49,000 during the month, ending a quarter in which monthly job creation in the private sector averaged just 84,000, the poorest showing since 1992 and just half the rate in the first nine months of the year.

        On Wall Street, the Dow Jones Industrial Average fell 250.40, or 2.3 percent, to 10,662.01, bringing its two-day decline to almost 284 points and leaving the blue chips with less than 16 points of their 299-point gain Wednesday.

        The Nasdaq Composite Index fell 6.2 percent, sliding 159.18 to 2,407.65 and leaving the high-tech dominated index with less than 116 points of Wednesday's almost 325-point gain. The broader Standard & Poor's 500 index was off 34.99 at 1,298.35, a 2.6 percent loss, leaving it with just 15 points from a 64.29-point advance Wednesday.

        “We have an economy that has slowed dramatically, and manufacturing has sunk into a recession,” said Robert Dederick, economic consultant for Northern Trust Co. in Chicago. “The question is whether the Federal Reserve will be able to keep the overall economy from heading into a downward spiral.”

        Acknowledging the slowdown, the Federal Reserve Tuesday announced a surprise half-point cut in a key interest rate.

        The current slowdown is the result of an effort by the Federal Reserve from June 1999 to May 2000 to boost interest rates enough to slow torrid growth to relieve inflation pressures.

        Analysts said the Fed's sudden action this week was an admission that it might have overdone the credit tightening.

        Manufacturing plants lost 62,000 jobs in December with 8,000 of those layoffs occurring at auto factories.

        “Manufacturers were hit hard last month and will continue to be under pressure,” warned Jerry Jasinowski, president of the National Association of Manufacturers. “We are in the midst of a sharp slowdown in activity.”

        Private analysts, however, said they still thought the Federal Reserve could prevent a full-blown recession if it continues to cut rates aggressively.

        “The Fed will do whatever it takes to keep the U.S. economy from going down the tubes,” said Bruce Steinberg, chief economist at Merrill Lynch in New York.

        Still, the forecast growth of around 3 percent or less this year would likely push unemployment up by a full percentage point to 5 percent by December, adding 1 million people to the jobless rolls.

        “The clouds on the horizon are becoming harder to ignore,” said David Wyss, economist at Standard & Poor's.

        In another report Friday, new-home sales fell by 2.2 percent in November to the lowest level in three months, a decline blamed on stock market volatility, higher energy prices and falling consumer confidence.

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