Jobless rate dips to 8.5 percent in December
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The celebration Friday of improving monthly unemployment numbers seemed rather like a running back who celebrates a touchdown when his team is behind by 34 points. There is a long way to go before the country fully recovers from the economic collapse of 2008 and 2009.
The national unemployment rate fell to 8.5 percent in December from 8.7 percent in November while employers added 200,000 jobs, the Bureau of Labor Statistics reported.
Wall Street was unimpressed, falling in early trading and ending the day just about even. The Dow Jones industrial average closed at 12,359.92, down 55.78 points, a change of 0.45 percent. The Nasdaq was up slightly to 2,674.22, a change of 4.36 points or 0.16 percent, and the Standard & Poor's 500 was down, closing at 1,277.81, a decline of 3.25 points or 0.25 percent.
Monthly unemployment is calculated through a composite of two surveys: the current population survey of households and the establishment survey of employers. Numbers are all seasonally adjusted to take out spikes from the holidays.
The decline in the unemployment rate was reported as a two-tenths of a percentage point drop to 8.5 percent, from 8.7 percent. The 8.7 percent figure was a revision of the previous estimate from November, originally reported as 8.6 percent.
December's lower unemployment rate didn't come about entirely because 220,000 people found jobs.
Heidi Shierholz, an economist with the Economic Policy Institute in Washington, D.C., said there is a lot of churning in the employment picture.
Another report, this one called "Labor Force Status Flows," gives an idea of what is happening. It showed the largest share of people who were working in November but jobless in December left the labor force. People leave work for lots of reasons, which can include retirements, going back to school and stopping work because of children.
Meanwhile, the people who entered the labor force in December mostly did so because they had jobs rather than just entering the labor force to look for work.
Ms. Shierholz said this confirmed her suspicion that people have been waiting on the sidelines for jobs to become available. Others entering the labor force were students who spent part of the month working during school breaks.
As for the unemployed, the report showed more were giving up their job searches than were finding jobs.
The manufacturing sector helped with job growth, adding 23,000 jobs. While manufacture of primary metals lost 100 jobs, fabricated metal products -- which include durable goods such as washing machines and refrigerators -- added 6,000 jobs. Motor vehicle manufacturing and parts added 6,500 jobs.
Scott Paul, the executive director of the Alliance for American Manufacturing, called the 23,000 jobs "welcome news for a sector that has shed one-third of its employment in the last decade."
He said if the sector can add 25,000 jobs a month, it will be back on track.
Health care, a growth industry in the Pittsburgh region, continued to add workers. Nationwide the health care industry added 22,600 jobs, including 11,300 in ambulatory health care services and 9,800 in hospitals.
Nationwide local governments cut 14,000 jobs, including 9,400 jobs in local schools. Overall government employment saw a net decline of 12,000 jobs, factoring in 2,000 new federal jobs and no change in state government jobs.
One odd number showed 42,200 more couriers and messengers added in December to the seasonally adjusted numbers. Ms. Shierholz, the economist, said she suspects the Bureau of Labor Statistics has not kept up with the increase of shipping from online purchases.
FedEx, for example, added 20,000 people just to keep up with the holiday shipments handled through the operations of its Moon-based units of FedEx Ground, Home Delivery and SmartPost, company spokesman David Westrick said. That was up from 17,000 holiday hires in 2010.
President Barack Obama, a Democrat seeking re-election this year, noted at an event at the Consumer Finance Protection Bureau that private employers added 212,000 jobs in December.
"Altogether, more private sector jobs were created in 2011 than in any year since 2005," Mr. Obama said. "After losing more than 8 million jobs in the recession, obviously we have a lot more work to do. But it is important for the American people to recognize that we've now added 3.2 million new private sector jobs over the last 22 months, nearly 2 million jobs last year alone."
The jobs deficit, which is the number needed to get employment levels back to pre-recession levels while factoring in population growth, now stands at 10.8 million jobs, according to the National Employment Law Project.
First Published January 7, 2012 12:00 am