The expert consensus proved wrong once again today, and extremely disappointing, as the Bureau of Labor Statistics today reported a drop of 85,000 in the country’s nonfarm employment for December. In one of the only bright spots in today’s report, the bureau revised its report for November, making that the only month since December 2007 to show a slight job gain. The official "U3" unemployment rate remained at 10.%. The decrease in jobs was substantially below the lowest estimate made by experts surveyed by Bloomberg last Friday. The "U6" unemployment rate, an alternative BLS measure that includes discouraged workers and part-time workers who want full-time jobs rose to 17.3%.
The tally of officially unemployed is now at 15.3 million, with the U6 population of unemployed and underemployed still clocking in at 26 million. The civilian labor force participation rate fell to 64.6 percent in December. The employment-population ratio declined to 58.2 percent.
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According to the BLS’s current population survey, the civilian workforce fell another 661,000 Americans in December. How many of these retired, decided to stay home to raise a child or take care of an elderly parent or decided to go to college or just got discouraged at looking for work, is unknown. Whatever their reasons, if they had stayed in the workforce, the unemployment rate today would be 10.5%.
Talk of a possible positive BLS jobs report for December grew in the media after the government originally reported last month that only 11,000 jobs had been lost in November, a sharp drop from previous months.
The question now is how long it will be before there is a positive jobs report. At least 8.2 million jobs have been lost during the Great Recession, and even if private-sector jobs were to be created at the rate they were during the Clinton administration, about 225,000 a month, it would take three years before as many people are employed as were working in December 2007, the last time that the economy showed job growth.
That kind of increase would be hard enough to sustain. But, while there are a few contrarians, many factors continue to point to tepid economic growth over the coming year, meaning that nowhere near 225,000 jobs will be created each month. For instance, in December, the Federal Open Market Committee was generally positive about an improving economy, but most participants
...anticipated that the pickup in output and employment growth would be rather slow relative to past recoveries from deep recessions. A moderate pace of expansion would imply slow improvement in the labor market next year, with unemployment declining only gradually.
How gradually is too gradually? If you’re one of the 6.1 million Americans who has been out of work for six months or more, or one of the several million working part time because you can’t get a full-time position, you’ll likely answer that question rather differently than if you’re a politician who thinks the biggest problem right now is deficit spending.
The BLS report also noted:
• Construction employment declined by another 53,000; manufacturing employment fell another 27,000.
• Employment in health care services rose by 22,000.
• The average workweek for production and non-supervisory workers stayed steady at 33.2 hours.
• The number of long-term jobless (27 weeks or longer) rose to 6.1 million.
• October job losses were revised from 111,000 to 127,000, and the losses for November were revised from 11,000 to a gain of 4,000.
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See discussion in SilverOz’s diary here.