January 9, 1999

Economy Rewards Workers With a Boom in U.S. Jobs Despite an unsettled global economy, lower corporate profits and a new round of layoffs, the American economy kept creating jobs at an astonishing pace in December, adding about 378,000 new positions. Unemployment fell to 4.3 percent, matching the 28-year low set last April. Signs of strength in the economy were impressive and widespread, showing healthy gains in employment and wages among disadvantaged demographic groups. For 1998 as a whole, net job growth was nearly 3 million and unemployment hovered between 4.3 and 4.5 percent. Except for a period at the height of the Vietnam War, the last time unemployment was this low for any significant length of time was in 1957. [Page A1.]

Dow Jones industrial average gains 105.56 points, or 1.1 percent, to close at record 9,643.32; Standard & Poor's 500-stock index rises 5.36 points, or four-tenths of 1 percent, to record 1,275.09; Nasdaq composite index climbs 18.32 points, or eight-tenths of 1 percent, to record 2,344.41; US Treasury's 30-year bond falls 21/32, to 99 24/32; its yield rises to 5.27 percent from 5.22 percent--its highest in nearly two months; graph on Dow Jones industrial average; charts on key stocks and US key interest rates (M)

New York City hospital emergency rooms are being inundated with 10 to 50 percent more patients than few weeks ago, thanks largely to flu season that began in earnest in mid-December; scenes at some of area's hospitals discussed; photo (M)

Special report, Unheeded Warnings, on failure of State Department to act on information pointing to threats to United States embassies in months preceding Aug 7, 1998, attacks in Tanzania and Kenya; Prudence Bushnell, Ambassador to Kenya, had been repeatedly turned down in her requests for a more secure embassy in face of terrorist threats, and other warnings came from Central Intelligence Agency, Federal Bureau of Investigation, and Gen Anhony C Zinni, commander of US Central Command; new report made public by commission appointed by Sec Madeleine Albright excoriates State Department for failing to safeguard US missions, particularly for giving vulnerable missions like one in Nairobi low priority; maps; photos (M)

AT&T Corp changes major part of its $31.8 billion plan for acquiring Tele-Communications Inc, saying it will not issue new stock to track combined company's consumer operations; change reflects shift in how market perceives AT&T's prospects; AT&T is touting synergies among two companies' operations as its stock soars and believes it has momentum to combine them under single equity (M)