Unemployment Rate Falls In December, U.S. Adds 103K Jobs

WASHINGTON (By Lucia Mutikani): The economy created far fewer jobs that expected in December, suggesting the Federal Reserve will complete its asset buying program, but the unemployment rate dropped to its lowest in more than 1-1/2 years.

Non-farm payrolls increased 103,000, the Labor Department said on Friday, below economists' expectations for 175,000. Private hiring rose 113,000, while government employment fell 10,000.

However, overall employment for October and November was revised to show 70,000 more job gains than previously reported. The unemployment rate fell to 9.4 percent, the lowest since May 2009, from 9.8 percent in November.

Economists raised their employment forecasts after payrolls processing company ADP Employer Services said on Wednesday private employers added 297,000 in December -- the largest gain on ADP records dating to 2000.

"The labor market improvement is still way slower than what everybody would hope for," said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.

Federal Reserve officials will weigh the jobs report when they meet on January 25-26. Signs of strength in the economic recovery had led to calls for the U.S. central bank to scale back its widely criticized $600 billion government bond-purchasing program aimed at keeping interest rates low to boost demand.

Some policymakers indicated in December they had a "fairly high" threshold for curtailing the stimulus program.

FED TO STAY THE COURSE

Fed Chairman Ben Bernanke speaks on the economic outlook before the Senate Budget Committee at 9:30 a.m.

Analysts say the Fed's focus is on unemployment and expect it to complete the bond-buying plan.

"Gains in payrolls won't be enough to spark a change in Fed policy until the gains either accumulate for many, many months or are accompanied by gains in inflation expectations," said Tony Crescenzi, a strategist at bond fund PIMCO.

The economy usually needs to create at least 125,000 jobs a month to keep the unemployment rate from rising, but a faster pace might be needed now since so many discouraged workers are sitting on the sidelines. As job growth picks up, these workers could re-enter the labor force, keeping upward pressure on the jobless rate.

Employment gains in December were led by the private services sector, which saw payrolls rising 115,000 after gaining 84,000 in November. Retail jobs increased 12,000 after a surprise 19,400 slump in November when retailers reported their best sales in years.

Temporary hiring, seen as a harbinger of permanent employment, increased 15,900 after 31,100 in November.

The goods-producing sector shed 2,000 jobs in December after losing 5,000 in November, but manufacturing payrolls rose 10,000. Construction employment fell 16,000 after slipping 2,000 in November.

The average work week was steady at 34.3 hours. Average hourly earnings increased three cents in December.

(Editing by Andrea Ricci)

Copyright 2010 Thomson Reuters. Click for Restrictions.

Comments

[Dokemion]

05:00 AM on 01/27/2011

In last year's State of the Union, Obama declared job creation his "No. 1 focus," then spent much of 2010 on other priorities like overhauling healthcare and Wall Street rules.

With the elevated unemployment rate still ranking as Americans' top concern, there is little doubt jobs will again be the centerpiece of Obama's speech.

But more than ever before, Obama is also expected to use the annual address to cast himself as more of a fiscal hawk, possibly a tough sell for a leader presiding over trillion-dollar-plus annual budget deficits.

http://employmentgenius.com/

[democrats for life]

03:23 AM on 01/08/2011

we finally got a president that can create jobs! Obama has created more jobs in 2 years, then Bush created in 8!

[katieandtom]

10:49 PM on 01/08/2011

are you living in the same america that i am? because the america that i live in does not have its citizens back to work.

[themodernleader]

02:52 PM on 01/07/2011

    Making excuses for gross incompetence and excuses for siding with the strong against the weak only guarantees teh decline and fall of an organization.  Surely, there are honorable, sagacious and prudent leaders that could also lead our nation out of this deepening depression.  Obama is an agent of the financial criminal cabal and other personal considerations.  His administration is a catastrophe in virtually everything American.  I was one of his first and most loyal supporters.  How was I to know he was a subversive front for corrupt financial interests?  Write the President and complain. I simply report the facts.

[letsbepeaceful]

04:14 PM on 01/07/2011

Would you like to name those 'honorable, sagacious and prudent leaders' that you would find acceptable?

[gerald4]

02:50 PM on 01/07/2011

IF THE US LABOR COST AND ENVIRONMENTAL COMPLIANCE MANUFACTURING COSTS ARE UNKNOWN, how can a business determine if starting and/or expanding their operations in the USA and/or hiring new US employees is going to be profitable?

How much is the US government is going to raise the current amounts that the government charges businesses for unemployment insurance rates next year?

The government has twice extended the number of weeks to pay the unemployed, and the government might extend the number of weeks of benefits again, and the cost increases to businesses for unemployment "insurance premium" increases are absolutely certain, but the amount of the increase is unknown.

The national healthcare cost estimates are probably similar to the initial Medicare cost estimates, and then the healthcare costs will probably be many many times more expensive that the government initial annual cost estimates, and these costs will be passed onto the businesses.

The amount of the payroll tax increases to pay for national healthcare are unknown.

Existing environmental laws, and the anticipated costs of future environmental legislation that will be "piled onto" our remaining US located industries (that stay in the USA) will be another factor causing the remainder of our US industries and US jobs to relocate to overseas locations.

Foreign environmental manufacturing costs are generally known.

[Bassplayer27]

03:30 PM on 01/07/2011

How would you explain that 2010 is the best year in private sector job growth since 2006; the height of the housing bubble.

All of your points are well heeded, but I think gov. needs to separate our approach toward small business and mega corporations. With regard to corporations, I don't believe it is regulation or taxes that cause businesses to shift overseas. It is about WAGES and BENEFITS.

Why are corporations not moving labor to Ireland, where the corporate tax rate is only 12.5%? Taxes could be 0% and there could be no regulations, and corporations will still outsource jobs to china, India, etc. because the cost of productivity will still be cheaper in those countries.

We need international labor laws to bring up the standard of wages internationally, and remove tax incentives for corporations to outsource labor.

Nationalized health care would reduce the burden of employer-based health care. Remember the HC law only applies to businesses with more than 50 employees.

Perhaps corporations should look at the increased cost of doing business in the US as an investment in the AMERICAN WORKER, which amounts to an investment of the long term viability of said corporation.

I think the reality is that corporations do not need America anymore to make mega profits. Growing global markets are allowing them to increase their consumer base beyond American consumption. It is up to our lawmakers to pass progressive reform that incentivize corporations to re-invests in the American worker.

[LivingDebtFree]

01:56 PM on 01/07/2011

Not sure about fixing the macro economic outlook up the country, but personally­, here is what every person should do (to the best of their ability)

1. Reduce spending until
2. Debt is paid off
3. Emergency fund is funded

Although we haven't been hurt too much, having that emergency fund in place sure has taken A LOT of stress out of our life. And the funny thing is, we actually spend more money now that we dumped all that debt.

http://www­­.hulu.com­/­watch/13­89­/saturd­ay-­night-­live­-dont­-buy-­stuf­f

[maidenofdforest]

01:51 PM on 01/07/2011

The unemployment dipped, claims getting less. We thought it was a joyful season. But still, no jobs. Nada.

[LivingDebtFree]

01:50 PM on 01/07/2011

It is interesting that people credit the success or failure of our economy on political parties. The failure of our economy happened because of:
1. Lending institutions
2. Regulatory bodies being in bed with lending institutions
3. Drunken frat party attitude of the average American consumer

I'm not sure how the government taking or giving 5 - 10% in taxes or anything else for that matter is supposed to rescue us or be the doom of us. Businesses and consumers are what will bring us out of this economic mess.

What government should be doing is working to clean up the regulatory bodies. Instead, they went from missionary position to doggie, letting Goldman Sachs write the legislation for them right out in the open.

[LivingDebtFree]

01:53 PM on 01/07/2011

And yes, government dictates those regulations and LOTS need to be changed (by people other than the industries they are regulating), but even the good regulations that were out there were being completely ignored. Look at the mess with BP in the gulf. It wasn't because there weren't proper regulations. It is that they were COMPLETELY ignored.

[samidean]

01:59 PM on 01/07/2011

So let me ask you this, which party has been notoriously known to constantly deregulate those lending institutions and industry?  Who is right now telling all, who want to listen, that they are planning on trying to undue every bit of regulation that the Dems and Obama managed to achieve the past two years.  Which party is it, that if you follow the money trail, got $10,000,000 dollars from the hedge fund managers in this last election, and just what party does one Michelle Bachmann represent, while she is now running around yelling that right after they repeal health care, they are going to repeal the financial reform bill?
 
I believe you know full well which party that is, so then the next question is, why don't they deserve to be blamed for their oh too friendly relationship with Wall Street and the corporations?

[LivingDebtFree]

02:09 PM on 01/07/2011

6 of one, half a dozen of the other samidean.

Republicans have deregulated a lot. Democrats regulated a lot. Those rules mean nothing if they aren't followed, which was my whole point.

Democrats wanted more lending to underprivileged families. That lead to more defaults. One area in which more regulation hurt.

As far as who got the campaign money, the previous election, the Democrats got the money from campaign managers. Money follows power in a corrupt institution such as our government.

[LivingDebtFree]

02:21 PM on 01/07/2011

As for your last paragraph... lets see who has the friendly relationship with Wall Street. Who were President Obama's economic advisors?

Summers -

Summers had come under fire for accepting perks from Citigroup, including free rides on its corporate jet in 2008.[56] According to the Wall Street Journal, Larry Summers called Chris Dodd asking him to remove caps on executive pay at firms that have received stimulus money, including Citigroup.[57]

On April 3, 2009 Summers came under renewed criticism after it was disclosed that he was paid millions of dollars the previous year by companies which he now has influence over as a public servant. He earned $5 million from the hedge fund D. E. Shaw, and collected $2.7 million in speaking fees from Wall Street companies that received government bailout money.[58] Oh, and he was a pusher of derivatives which is the #1 cited cause of our economy being wrecked.

Sperling - Took $889,000 in consulting fees from Goldman Sachs.

Peter Orzag - Went to Citigroup

Volkner -

[samidean]

01:40 PM on 01/07/2011

To all of you so called Dems, who are not happy unless you are whining, you need to get REAL.  I do not believe you even begin to understand the enormity of the mess that Bush left this country in.  This was nothing close to the usual recession.  We were literally at the brink of another DEPRESSION when Obama took over, and he has not only been able to stop us from sliding into a depression, but actually start turning things around, while also having to deal with the most horribly obstructive Republican party in history.
 
While you whine and moan about Obama hasn't done everything you want, WHERE THE "H" HAVE YOU BEEN FOR THE PAST TWO YEARS?  My goodness people, the childish, and very dangerous game the right has been playing in their zeal for bringing Obama down, and in doing so showing their total disregard towards the American people, has been so totally apparent, that only the totally delusional could not have seen it.
 
Now, thanks to all of the whining and moaning, and sitting on your collective butts, instead of voting, we have a Republican controlled House, who has made it quite clear that their only agenda is to undo everything that Obama and the Dems managed to get through despite the extreme obstruction from the right, and yet I have no doubt that you will be playing into their hands by blaming Obama.  No things are not moving quickly, but if you had the slightest concept of how deep of a recession that Bush left this President, you might be able to understand why.  It does not, however change the fact that Obama has indeed, turned things around, and no amount of your whining can change that fact.
 
It is clear that many of you have still not learned the valuable lesson from this last election, that your moaning and whining will get you nothing more than more Republican control in 2012, if you don't wise up.  I have always found it astounding that the Republicans keep thinking if they just keep doing the same things over and over, and over again, that some how, some day things will just magically work, but now I see the so called Dem base thinking that continuing to do the same thing they did last year, that helped to usher in John Boehner as Speaker of the House, is going to somehow come out differently in 2012.  WAKE UP because I assure you that it won't!!!

[MiddleMolly]

01:45 PM on 01/07/2011

Great comment!

And though I haven't been completely happy with Obama and the Dems, I agree with you completely..... Would we really rather have the Repubs in the Senate and the White House come 2012?

The stronger the voices and the message of people who consider themselves more liberal/progressive, the more the Dems will listen to that portion of their constituency.... but more important, the message and voices of this group will begin to resonate with the "middle". The message and the voices of the baggers resonated with the "middle" in 2010, and that is how we got into this mess now with the Repubs in the House.

[samidean]

01:52 PM on 01/07/2011

Oh yes, I too have at times been unhappy with Obama, as I was with Clinton, but, he was right about one thing and that is that the so called "professional left" clearly helped build the apathy that led to many sitting home on election day.  The proof is in the turnout numbers.  17 million Republicans voted and only 16 million Dems voted.  Had a little over 1 million more Dems got out and voted, the results would have been much different.  As my dear, now deceased mother used to tell us kids, if you don't think it is important enough to go and vote, then you have absolutely no right to gripe about the government that you get.  I don't know how much more clear the results of this last election could be than to prove her words to be so very right.

[saveourplanet]

02:38 PM on 01/07/2011

You are completely correct samidean!!

I posted something similar (although not as eloquent) to what you are saying on the story about the Tea-Publicants trying to overturn EPA green house gas legislation!

Democrats, liberals, independents need to mobilize and publicize the effects taking place from voter indifference that occurred in Nov. 2010!

ELECTIONS HAVE CONSEQUENCES!!

[themodernleader]

01:28 PM on 01/07/2011

   As I have stated repeatedly, this economy is a money-chasing-money, boom-and-bust shadow of a worthy economic system.  It is failing the American people as it transforms a criminal and predatory capitalistic elite into oligarchs. 
    The President as leader of this nation is failing his job description.  In two years he must be replaced.

[MiddleMolly]

01:46 PM on 01/07/2011

And who would you prefer? Palin? Romney? Huckabee?

[samidean]

01:46 PM on 01/07/2011

With who Sarah Palin?  Grow the F up and learn what is actually going on.  Do you have the slightest clue as to what Obama was left with?  Your comment shows that you apparently have no clue just how bad it really was.  Yes by all means let's allow the Republicans to gain even more in 2012 and see if that is going to change the corporate run country that we now have.  Obama didn't create this climate.  30 years of Reaganomics have, so yes let's let them have more by your childish way of thinking and see how well that works out for us.

[gmb007]

12:56 PM on 01/07/2011

103K jobs in December* sounds pretty good, right?

Hardly.

Population differences aside, that translates to only 2060 jobs per state.

That job rate doesn’t even keep up with population growth/new workers entering the job market, never mind 15M+ existing jobless.

Folks, nothing, nothing, NOTHING will change until our jobs STOP going overseas.

The jobs “creation” debate is red herring bull.sh.#.t. Jobs ARE being created - just NOT in the US.

* many only seasonal/temp/part-time

[Bassplayer27]

01:10 PM on 01/07/2011

259K of the 1.35M private sector jobs created in 2010 are temporary; a rate of 19%.

19% is also the same rate of temp hiring, from Oct - Dec., of all private sector jobs created. It is inaccurate to claim that private sector job increases are only temporary jobs.

In the one year period from May 2008 to April 2009, 6.5M PRIVATE SECTOR jobs were lost - avg. of 540K LOST per month.

In 2010, the private sector has had 12 straight months of job gains and created 1.35M private sector jobs; an avg. of 112K private sector jobs gained per month.

Not where we need to be but much better from where we've been. Hopefully job creation will continue to expand.

[sophiemaki]

01:11 PM on 01/07/2011

only a fool would believe 103k jobs in Dec was 'pretty good"!

[Bassplayer27]

01:20 PM on 01/07/2011

Only a fool would not look at the economic context, failing to admit that 113K private sector jobs GAINED is much better than 806K private sector jobs lost (Jan. 2009).

[Chucktheman]

12:42 PM on 01/07/2011

If we want to restore our GDP, while allowing all these imports under the WTO agreement, we should at least require American content in materials be a part of any import. That would put a lot of Americans to work while we re educate and create a buffer for further decline.

[LivingDebtFree]

01:44 PM on 01/07/2011

We can't because of WTO rules implemented under President Clinton. We would get sued and fail in international court.

[MiddleMolly]

01:49 PM on 01/07/2011

I do agree that we should have restrictions of some kind on what is imported... but how realistic is it that anything like that will happen, particularly now with the Repubs in the House?

[outnow]

12:38 PM on 01/07/2011

Ain't G-L-O-B-I-L-Z-A-T-I-O-N grand! Cheap labor = slave labor. See? They finally got what they wanted. Sweat shops in Asia. Unemployment in the US.

Devine right of kings was replaced by devine right of financiers who can more easily manipulate a globalized economy.

Free trade policies of Empire are modeled on a neoliberal model and backed up by our military.

The poor are becoming poorer while the rich are getting richer. Get it? The benefits of globalization are not being broadly shared because it is so undemocratic. Because it is undemocratic, it controls markets.

We have outsourced slavery and impoverished the middle class while making the rich, richer. Mission accomplished!

[MiddleMolly]

01:50 PM on 01/07/2011

So....what can be done about this? Anything?

[gerald4]

02:40 PM on 01/07/2011

Repeal the NAFTA and WTO treaties that were created by President Bill Clinton!

Vote to repeal any and all other FREE TRADE treaties!

Lobby the congress to vote against President Obama's proposed South Korea Free Trade Agreement (SKFTA) treaty further cause the relocation of more existing US jobs to South Korea!

I guess another few million unemployed US citizens will not matter to President Obama!

[Arts4u]

12:37 PM on 01/07/2011

http://www.youtube.com/watch?v=24htWkdp4IA

[Chucktheman]

12:35 PM on 01/07/2011

The House is full of Bush era Republicans. Let them stand on their record.
Job Growth by President

Harry S. Truman (Democrat): increase of 2.95 percent a year
Dwight D. Eisenhower (Republican): increase of 0.50 percent a year
John F. Kennedy (Democrat): increase of 2.03 percent a year
Lyndon B. Johnson (Democrat): increase of 3.88 percent a year
Richard M. Nixon (Republican): increase of 2.16 percent a year
Gerald R. Ford (Republican): increase of 0.86 percent a year
Jimmy Carter (Democrat): increase of 3.45 percent a year
Ronald Reagan (Republican): increase of 2.46 percent a year
George H.W. Bush (Republican): increase of 0.40 percent a year
Bill Clinton (Democrat): increase of 2.86 percent a year
George W. Bush (Republican): increase of 0.01 percent a year

[Chucktheman]

12:49 PM on 01/07/2011

Reagan did the best out of the Republicans, but also had the highest increase in national debt at 189%

[MiddleMolly]

01:52 PM on 01/07/2011

I've looked at similar figures before, and I was astounded at the increase during the much-maligned Carter years... one of the highest increases of any President since WWII. In one measure (don't have the figures off hand), Carter was higher than Johnson in job creation.

[saveourplanet]

03:02 PM on 01/07/2011

Just think if our country had put in place many of the energy conservation ideas Pres. Carter wanted.

We would much better off and America would be more financially secure if we had put them into action!

[xargaw]

12:22 PM on 01/07/2011

Our trade agreements are unAmerican, but our tax incentives to corporations to offshore operations are much worse. Incentivising offshoring is criminal and any Congress person or Senator that votes in favor of this (nearly every Republican) should be hammerd for it repeatedly on every TV appearance until every American knows what they have done. They get away these votes because average Americans have no clue what they have done. If the spot light were on them for these votes, they would not be able to cast them and remain in office.

[Chucktheman]

12:31 PM on 01/07/2011

They know it is bad for our GDP at home, yet they and the Chamber of Commerce continue to lay waste to the American economy giving wealth to a few at the expense of the nation as a whole.

[binkis1]

12:38 PM on 01/07/2011

Another doom bringing article when it could be looked at more positively! Our real problem is with the media not reporting real news and misleading the public !

http://www.worldpublicopinion.org/pipa/articles/brunitedstatescanadara/671.php?nid=&id=&pnt=671&lb=