The U.S. economy added 155,000 jobs in December, and the unemployment rate is now 7.8 percent, the Labor Department announced Friday.
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From the Associated Press:
WASHINGTON — U.S. employers added 155,000 jobs in December, a steady gain that shows hiring held up during tense fiscal cliff negotiations in Washington.The solid job growth wasn't enough to push down the unemployment rate, which stayed 7.8 percent last month, according to the Labor Department's report Friday. November's rate was revised higher from an initially reported 7.7 percent.
Stock futures rose modestly after the report was released.
Robust hiring in manufacturing and construction fueled the December gains. Construction firms added 30,000 jobs, the most in 15 months. That likely reflects additional hiring needed to rebuild after Superstorm Sandy and also solid gains in home building that have contributed to a housing recovery.
Manufacturers gained 25,000, the most in nine months.
Even with the gains, hiring is far from accelerating. Employers added an average of 153,000 jobs a month last year, matching the monthly average in 2011. Employers added 1.84 million jobs in 2012, the same as the previous year.
Still, the stable hiring last month means employers didn't panic during the high-stakes talks between Congress and the White House over tax increases and spending cuts that were not resolved until the new year. That's a good sign for the coming months, since more budget disputes are expected.
While the parties reached a deal this week that removed the threat of income tax increases on most Americans, they postponed the more difficult decisions on cutting spending. And the government must also increase its $16.4 trillion borrowing limit by around late February or risk defaulting on its debt.
There were indications in the December report of the job market's ongoing sluggishness. The number of Americans unemployed actually rose 164,000 to 12.2 million. The unemployment figures come from a separate survey of households, while the job counts are derived from a survey of businesses.
Still, the economy is improving. Layoffs are declining, and the number of people who sought unemployment aid in the past month is near a four-year low.
The once-battered housing market is recovering. Companies ordered more long-lasting manufactured goods in November, a sign they are investing more in equipment and software. And Americans spent more in November. Consumer spending drives nearly 70 percent of economic growth.
Manufacturing is getting a boost from the best auto sales in five years. Car sales jumped 13 percent in 2012 to 14.5 million. And Americans spent more at the tail end of the holiday shopping season, boosting overall sales that had slumped earlier in the crucial two-month period.
Also on HuffPost:
| @ ArthurDelaneyHP : Wow: 1.5 million out of work 99+ weeks in December, down from 1.9 million last year |
Remember how a month ago everybody was totally freaking out about how the labor force was shrinking, meaning we had all abandoned hope and resigned ourselves to living under bridges in Obamaville shanty towns forever?
Well, prepare to not freak out any more, for at least a month: The labor force grew by 192,000 people in December. Month-to-month changes in this number are so much statistical noise, but since everybody freaks out about them, I'd point out that a growing labor force is a good sign, meaning people have hope that they can get a job. The employment-population ratio did tick down a tiny bit, to 58.6 percent from 58.7 percent, which is really low. But there are other explanations for this besides despair, including simple demographics -- a lot of people are retiring.
Join us next month, when the labor force falls again, and we can all freak out again.
--Mark Gongloff
Gentleman finance blogger Barry Ritholtz had a helpful post this morning putting the past 20 years of job growth in perspective.
It turns out that the FIRE industry -- finance, insurance and real estate -- has been responsible for the biggest chunk of job growth in the past two decades. Not so much lately, which may help explain the relative crapitude of the job market. The industry added just 9,000 jobs in December, and it has grown by just 80,000 jobs in the past year.
Health care has been the second-biggest job creator for the past two decades, followed by the low-paying leisure and hospitality industries. Unlike FIRE, both of these industries are still churning out the jobs. "Health care and social assistance" added 55,000 jobs last month, while "leisure and hospitality" added 31,000 -- almost entirely at restaurants and bars.
That might help explain why the only jobs many people can get these days are of the low-paying variety, as Bonnie Kavoussi noted recently.
--Mark Gongloff
From a research note from Paul Ashworth, chief U.S. economist at Capital Economics:
The 155,000 increase in non-farm payrolls in December is yet another month of job growth that is just about enough to keep pace with the underlying growth in the labour force, but not enough to drive the unemployment rate markedly lower. This has been the story throughout the recovery that began more than three years ago.
--Bonnie Kavoussi
From Jim O'Sullivan, chief U.S. economist at High Frequency Economics:
In short, not especially strong nor weak. While a 150-170K per month trend in payrolls is far from booming, it is strong enough over time to keep the unemployment rate moving down given slowing in the secular trend in labor force growth. Unemployment was flat in December, but it is down 0.4 points in the last six months.
--Bonnie Kavoussi
| @ ObsoleteDogma : Most interesting part of this jobs report is what's not there—no #RecoveryWinter yet. |
AP economics reporter Chris Rugaber notes that economists usually get their jobs report predictions wrong:
| @ ChrisRugaber : Wow, a jobs report that was almost exactly at consensus, what a surprise. #jobs |
The jobs report always has a big margin of error though, so we shouldn't be too hard on economists on this issue, at least.
--Bonnie Kavoussi
The Wall Street Journal's Sudeep Reddy notes that the government actually has been shedding jobs every year since 2009, even as the economy faces persistently high unemployment:
| @ Reddy : Government jobs (federal/state/local) fell 68,000 in 2012. Losses of 265k in 2011, 221k in 2010, 76k in 2009. Five years of gains pre-2009. |
What stimulus?
--Bonnie Kavoussi
Some real talk from Betsey Stevenson, an economics professor at the University of Michigan:
| @ BetseyStevenson : Today's job report shows growth at consensus & a slowly recovering labor market. But unemployment is still the biggest problem we face. |
--Bonnie Kavoussi
The liberal Economic Policy Institute writes in to remind us that the job market is still in a depressingly deep hole.
We are still 4 million jobs away from getting back to pre-recession employment -- we've only recovered about half the jobs we lost.
Add in the jobs we should have been creating in a normal economy, and we're actually about 9 million jobs in the hole, the EPI writes.
"At December’s growth rate the labor market will not fill in that gap until the end of 2021," the EPI writes.
--Mark Gongloff
Dan Greenhaus of BTIG points out that, oddly, retail payrolls shrank by 11,000 in December, which is unusual.
Government payrolls shrank by 13,000.
Temporary jobs also fell by 1,000 -- maybe not a great sign for future hiring.
Where are all of our future jobs coming from? Health care, up 45,000 in December.
--Mark Gongloff
From Justin Wolfers, an economics professor at the University of Michigan:
| @ justinwolfers : In 2011, the economy added 153k jobs per month. In 2012, it added 153k jobs per month. Yet somehow the intervening period felt more volatile |
--Bonnie Kavoussi
From Justin Wolfers, an economics professor at the University of Michigan:
|
| @ justinwolfers : If what you want to do is *slowly* reduce unemployment, then this is good enough. |
--Bonnie Kavoussi
| @ ReformedBroker : I get all my economics and political news from men who shout very loudly. I |
| @ joebrusuelas : An increasing unemployment rate is likely a sign the unemployed are re-entering the workforce, confident of finding employment. #EcoBrief $$ |
Timothy Aeppel, The Wall Street Journal's New York economics bureau chief, notes that the jobs report could have been much worse, considering that many businesses were worried the government could plunge the economy into recession by going over the "fiscal cliff":
| @ TimAeppel : Number is "meh" to be sure--but considering business anxiety over cliff/uncertainty, actually pretty strong report. |
That said, a bigger source of uncertainty still looms: the debt ceiling, which the U.S. is on track to hit around February if Congress does not raise it. Some Congressional Republicans, including Senate Minority Leader Mitch McConnell, have said they plan to hold the debt ceiling hostage in order to extract spending cuts from the Obama administration.
--Bonnie Kavoussi
Let's call this what it really is: A blecch report. It's not bad, but we're treading water and nothing more.
It takes about 150,000 jobs per month, on average, just to keep up with growth in the labor force, and that's what we've been getting lately. The unemployment rate really isn't falling quickly enough.
Good thing we're obsessing over federal budget deficits instead of job creation!
--Mark Gongloff
| @ IanShepherdson : Wake me up when something interesting happens in the payroll numbers. |
From a research note from Rob Carnell, senior economist at ING:
There was better news (from an activity perspective) from wages, with hourly earnings rising for a second consecutive month (2.1%YoY) and hours worked also picking up to boost average weekly earnings too. This rise is long overdue, and will help to offset the rise in taxes paid as payrolls taxes rise for the bulk of employees over coming months.
--Bonnie Kavoussi
| @ quartznews : The complete US jobs report for December in two simple charts http://t.co/8WQcyNOL http://t.co/HpgjwoCM |
Wall Street Journal economics reporter Sudeep Reddy notes you'll have a better chance of getting a job that way:
|
| @ Reddy : Dec. jobless rate: 7.8%. For people 25+ with bachelor's degree or more: 3.9%. High school grads: 8%. No high school diploma: 11.7% |
--Bonnie Kavoussi
On CNBC, Rick Santelli just went nuts on Kelly Evans after she quoted a tweeter talking about "lunatic Republicans" holding the economy hostage in the debt ceiling debate. Nobody's allowed to mention lunatics without including Rick Santelli, Kelly!
Then he started yelling at economist Jared Bernstein, telling him to be a man about the deficit. He called Kelly childish for ignoring the deficit.
Rick Santelli could not possibly be more angry about the deficit and the small, girly children who created it, who for the most part were Republicans.
--Mark Gongloff
| @ EricGPlatt : CHART: Great look at NFP over the past year from Reuters (showing 1.8M total new jobs created in 2012) http://t.co/aCknQb9s |
| @ bySamRo : Moving forward "household survey data for January 2013 will not be directly comparable with that for December 2012 or earlier periods." -BLS |
The markets are mildly pleased by this report, and WE MUST PLEASE OUR MARKET OVERLORDS.
Dow Jones Industrial futures are up 10 whopping points after the jobs report. They were unchanged before the report. S&P 500 futures are up about 3 points, not far from where they were before the report. Nasdaq futures are up 8 points, about where they were before the JOBS REPORT THAT CHANGED EVERYTHING.
The only semi-interesting thing that is happening in markets right now is the 10-year Treasury note, which was yielding 1.97 percent earlier this morning and is now yielding 1.93 percent. That implies a smidgen weaker economic growth, maybe.
I told you it was only semi-interesting, didn't I?
--Mark Gongloff
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| @ justinwolfers : Given the sampling error surrounding the monthly payrolls numbers, it's astounding just how consistent recent data have been. |
| @ Neil_Irwin : Huge 30k gain in construction jobs. May include Sandy rebound, but also what we would expect given rise in housing starts. |
|
| @ Neil_Irwin : Ah, correction: revised unemployment rate for Nov. was 7.8%, not 7.7%, so technically the rate held steady in Dec. |
Excitement times one million, folks. Here are this morning's jobs numbers, most of which will be revised into oblivion. But anyway!
The economy created 155,000 new nonfarm jobs in December, exactly as the economic wizards forecast. That like never happens.
The unemployment rate ticked up to 7.8 percent, the same as in November -- and, again, the same as economists expected.
November's payrolls were revised up by 15,000 extra jobs, so yay.
SO MANY MORE NUMBERS TO COME, so stick around.
--Mark Gongloff
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Posted: 01/04/2013 8:32 am EST | Updated: 01/04/2013 1:27 pm EST