WASHINGTON, Jan. 5, 2007
Employment Ends Year On Strong Note
More Hiring, More New Jobs, And A Steady Unemployment Rate Of 4.5% In December
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(CBS)
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The latest snapshot of the nation's employment climate, released Friday by the Labor Department, showed that the jobs market ended 2006 on a strong note and provided fresh evidence that the troubled housing and automotive sectors aren't dragging down employment across the country.
"This is a very low unemployment rate by historical standards. There are jobs out there. There aren't a lot of people looking for them," David Wyss, chief economist at Standard & Poor's, told CBS Radio News.
Analysts had predicted that 132,000 new jobs would be created and that the unemployment rate had held steady at 4.5 percent, reports CBS News correspondent Alexis Christoforous. The job-creation number was even better than expected, and the rate prediction was dead on.
"The numbers were very good, unexpectedly good, actually, and it just continues to show how resilient the U.S. economy is," Touro College finance professor Peter Sperling told CBS Radio News.
For all of 2006, the nation's unemployment rate dropped to a six-year low of 4.6 percent. In 2005, the unemployment rate averaged 5.1 percent.
With the economy losing momentum, though, many economists predict the jobless rate will climb this year and average around 4.9 percent.
Employers showed not only a greater appetite to hire in December but also more willingness to boost compensation to workers.
"It's partly a reflection of the strength in the labor market. As the labor market remains tight, employers are willing to pay more," said Sperling.
Workers, many of whom had seen their paychecks eaten by inflation, saw wages grow robustly last month. Average hourly earnings jumped to $17.04, a sizable 0.5 percent rise from the prior month. Analysts were forecasting a more modest, 0.3 percent increase.
Over the last 12 months, wages grew by a strong 4.2 percent. That matched the annual gain registered in November and was exceeded only by a 4.3 percent annual increase in November 2000.
Growth in wages should support consumer spending — a force that helps drive the economy. But a rapid and sustained advance — if not blunted by other economic forces — can stoke concerns about inflation.
"It's good for earnings from a standpoint that we're getting paid more, but it's bad from a standpoint that the Fed is going to be worried more and more about inflation," said Wyss. "It certainly eliminates any chance of an interest rate cut in the near future."
Federal Reserve Chairman Ben Bernanke says the central bank will be on close watch for any signs that wage growth might be spurring an unwanted pickup in inflation.
The Federal Reserve, which has boosted rates 17 times since June 2004 to fend off inflation, has been on the sidelines since August. Analysts believe the Fed will keep its finger on the interest-rate pause button when it meets next on Jan. 30-31.
"Hiring increases have been pretty consistent across the board, except in manufacturing and construction," said Sperling. "The auto industry continues to be weak, but in most of the rest of the economy — the service sector, retail, financial services — employment is pretty good."
The latest employment snapshot comes as the new Democratic-controlled Congress, which convened Thursday, will now play a lead role in shaping policies for workers and businesses.
A top priority for Democrats is boosting the federal minimum wage from $5.15 an hour to $7.25 an hour. President Bush said he supports such a move as long as it is paired with business-friendly provisions, which would soften the sting to employers who would have to dole out more in labor costs.
The job hunt got shorter in December.
The average time that the 6.8 million unemployed people spent in their job searches was 15.9 weeks, down from 16.3 weeks in November.
The strong showing on jobs comes even as the economy lost steam throughout last year.
Economic growth slowed to a pace of 2 percent in the late summer — the most recent period available — and is expected to remain sluggish for a while as the economy works its way through fallout from the housing slump and the lingering impact of two years of rising interest rates.
Even with the expectations for slow growth ahead, most analysts don't believe the economy will slide into recession, but they do predict that the unemployment rate will climb.
© MMVII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
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See all 25 CommentsMy favorite is the calculation of poverty in america. What if I said 3 percent of Americans were living in poverty? Well what does poverty mean exactly?
What does unemployment mean? It doesn't mean being out of work.
Geeze. I wonder where he got that from?
The ONLY real threat to a Fascist Tyranny, I mean the US Government, is the Laborers.
Power to the People - John Lennon
You can't even believe this lousy ficticious artice.
I remember when people getting out of college actually got this thing called "job offers".
Posted by luvNY at 02:43 PM : Jan 05, 2007
To them "labor" is just another number in the equation. To them "laborers" are not real human beings, they are just an asset or not. Something to be used or discarded when no longer useful. It sounds like some scary novel of the future that no one takes seriously because they are all convinced that it can't happen here. It is that arrogance, that naive stupidity, that the social scientists of the right wing are counting on. We have had it so soft for so long that we are, for the most part anyway, convinced that we have grown past it and that it can't happen in human history again. Which is exactly why, if we're not careful, it will.
You still haven't removed your head from up your asss. Majority of those new jobs=no insurance.
r_bayless - Sorry I know what you went thru and are now. Hopefully the Dems can put us back on our feet but may be too late for a lot of it.
It's a harsh world out there these days - especially for those of us just trying to stay in the "middle class".
Posted by r_bayless at 02:01 PM : Jan 05, 2007
Exactly back at ya. The number one target of the Neoconservative movement is the middle-class. They do not want one to exist. Working class people (the proletariat) are more easily managed, esp without such hindrances as safety, the environment or child labor laws to slow your business down. The goal is a 100% pro-business agenda. They honestly believe that America runs better when it's run by big businessmen. Bush's number one tax advisor is a man name Grover Norquist (google him if you want true terror in your life). He said that the goal is to shrink government down to a point here they can "drown it in a bathtub". So Bush and his minions use phrases like smaller government (which everyone, including me, likes), but neglects to say that the smaller government is going to mean no regulation at all, which no thinking person wants!
As a Detroiter, I'm sick of hearing about the robust national increase in the these Half-A$$ed McJobs.
P.S. Why do some of the more stupid conservatives complain that we liberals are being insulting by using the word "Neocon"? The neoconservatives gave themselves that name, no one else did.
You are well qualified as a spokesman for this administration and the Republican Party of late, and unfortunately, much of the MSN. Half-truths and twisted fasts are the rule of the day.
Payrolls went up by 16,7000 not 2 million, and unemployment did not drop by 2 million as you claim, it remained steady.
You refer to the $17.04 an hour average income stated in this article. Numbers are used to give whatever impression desired by the user. For instance, if the statistics used in this case did not include the increases for CEO and higher echelon %u201Cearnings%u201D the average income would have been significantly less.
It is a well-established fact that the average household can no longer survive on only one income.
In a household with children, if a wife or husband were to lose their spouse the family can become destitute without aid.
If the $17.04 average income were accurate then why are we about to raise the minimum wage from $5.25 an hour?
You make another wontedly false claim by stating %u201Cthe vast majority once again have health insurance. Very few of above-mentioned 167,000 new jobs guarantee insurance for the family.
You said %u201Cthe deficit dropped like a rock%u201D but of course you conveniently neglected to add the nearly half-trillion dollar interest on the national debt to the new deficit, or to state what it actually is currently.
The main culprits here are the gullibly complacent general public.
Well if the workers don't like their wage, they can change jobs. I started out making min wage, when it wasn't enough, I worked myself into a better paying job. I believe we have the 'Right to Prosper' NOt the 'Right to BE Prosperous'...BIG difference. In this country you have the freedom to work towards whatever you'd like. You have the right to continue your education, to improve yourself and so forth. Should you choose not to do that, then you 'reap what you sow'.
Posted by getserious1 at 10:30 AM : Jan 05, 2007
Getserious1
GREAT POST, couldn't have said it better myself, except, instead of NeoLib's, I would have used NeoCommies. GREAT POST though
.......
http://www.bls.gov/web/cesbd.htm
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