IBJNews

U.S. jobless rate falls as employers add 200,000 jobs

Associated Press
January 6, 2012
Back to TopCommentsE-mailPrintBookmark and Share

A burst of hiring in December pushed the unemployment rate to its lowest level in nearly three years, giving the economy a boost at the end of 2011.

The Labor Department said Friday that employers added a net 200,000 jobs last month and the unemployment rate fell to 8.5 percent, the lowest since February 2009. The rate has dropped for four straight months.

The hiring gains cap a six-month stretch in which the economy generated 100,000 jobs or more in each month. That hasn't happened since April 2006.

"There is no question that today's employment report is a positive and there is also no question that the pace of job growth has accelerated of late," said Dan Greenhaus, an analyst at BTIG LLC, a brokerage firm

A better job market is a positive sign for President Barack Obama, who is bound to face voters with the highest unemployment rate of any sitting president since World War II. Unemployment was 7.8 percent when Obama took office in January 2009.

Still, the level may matter less to his re-election chances if the rate continues to fall. History suggests that presidents' re-election prospects hinge less on the unemployment rate itself than on the rate's direction during the year or two before Election Day.

For all of 2011, the economy added 1.6 million jobs, better than the 940,000 added in 2010. The unemployment rate averaged 8.9 percent last year, down from 9.6 percent the previous year.

Economists forecast that the job gains will top 2.1 million this year.

The December report painted a picture of a broadly improving job market. Average hourly pay rose, providing consumers with more income to spend. The average work week lengthened, a sign that business is picking up and companies may soon need more workers.

And hiring was strong across almost all major industries.

Manufacturing added 23,000 jobs, as did the health care industry. Transportation and warehousing added 50,000 jobs. Retailers added 28,000 jobs. Even the beleaguered construction industry added 17,000 workers.

More jobs and higher pay are crucial to helping the economy grow. They could enable shoppers to increase spending, which fuels 70 percent of economic activity.

The economy likely grew at an annual rate of above 3 percent, a healthy pace.

Still, the job market has a long way to go to recover from the Great Recession. The nation has 6 million fewer jobs that it did in December 2007, when the recession began.

In addition to the more than 13 million who were unemployed in December, a lot of people can't find full-time work. And many who are unemployed have stopped looking for jobs. The government only counts people as unemployed if they are actively searching for jobs.

When including those groups, the broader "underemployment" rate was 15.2 percent. That's down from 15.6 percent the previous month, but still high. The figure has dropped for three straight months.

A more robust hiring market coincides with other positive data that show the economy ended the year with some momentum.

Weekly applications for unemployment benefits have fallen to levels last seen more than three years ago. Holiday sales were solid. And November and December were the strongest months of 2011 for U.S. auto sales.

Many businesses say they are ready to step up hiring in early 2012 after seeing stronger consumer confidence and greater demand for their products.

ADVERTISEMENT

  • What's real?
    What's the average correction they make on the first numbers they throw out? Wouldn't a better gauge of employment be had by comparing SS or other payroll taxes to a year ago? A increase in jobs paying $8-9.00 an hour part time shouldn't impress anybody.
  • Jobs
    Currently, there are over 4 million jobs that are not being filled due to the computer screening methods used for online application gathering. I remember the good old days when people could walk into the HR Department, drop off their resume, and possibly gain the opportunity to speak with a real person in the Employment Department.
  • FAKE
    This is happening because unemployment benefits are running out, so according to the books, if they are off unemployment, then they must be employed. The same number of people if not MORE are still unemployed. Dont let the government fool you, things arent getting better, they are getting worse, and the rest of america is 1 paycheck away from $#it hitting the fan.

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    Subscribe to IBJ
    ADVERTISEMENT