The Labor Department December jobs report is out and when you hear that the unemployment rate dropped to 9.4 percent from 9.8 percent, you might be excused for thinking that it was a good report. Don't be fooled--it was actually a bad report.
The US economy only created 103,000 total new non-farm jobs last month (the private sector added 113,000, while the government axed 10,000). Oh sure, we got revisions of an additional 70,000 for the past two months, but we need to create about 125,000 a month just to keep pace with new entrants to the work force, so this is still a weak report.
We learned that there are still 14.5 million Americans out of work, of which over 6.4 million (44.3 percent of the total unemployed) have been out of work more than 27 weeks. One can only imagine that many of these folks are on their way to becoming "99ers".
No matter how you slice it, this report shows that the Great Recession has had a devastating effect on the US economy, not to mention employee psyche. From Calculated Risk:
For the current employment recession, employment peaked in December 2007, and this recession is by far the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only the early '80s recession with a peak of 10.8 percent was worse).
And about that "great" unemployment rate...we can attribute a good chunk of the drop to the fact that people simply stopped looking for work--260,000, to be exact. This leaves the labor force participation rate at a low 64.3 percent.
Here's a snapshot of the December report highlights:
- December: +103K total jobs (+113K private sector)
- November: Revised to +71K from +39K
- October: Revised to +210K from +172
- Total jobs added for 2010: 1.1 million (94K/month)
- Unemployment Rate: 9.4 percent from 9.8 percent in Nov
- Under-Employment Rate (marginally attached, part-time): 16.7 percent (high was 17.4 percent in October 2009)
- Unemployed persons: 14.5 million
- Long-term unemployed (jobless for 27 weeks and over): 6.441 million, up from 6.313 million in November (peak was 6.8 million in May 2010)
- Part-timers (or have had hours cut for economic reasons): 8.9 million -- this has been hovering around the high level of 9 million since August 2009
- Average Hourly Earnings: +3 cents to $22.75 - over the past 12 months, average hourly earnings have increased by 1.8 percent
- Average Workweek: 34.3 hrs
- Temporary help services: +16K, +495,000 since low of September 2009
- Leisure/Hospitality: +47K
- Health care: +36K
- Retail: +12K
- Manufacturing: +10K (flat since May)
- Construction: -16K