The Bureau of Labor Statistics reported the private sector generated 257,000 jobs in December and the official unemployment rate fell to 8.3 percent, the lowest level since February 2009. Layoffs in the public sector cut the total number of jobs created to 243,000. The fact that the official rate fell at the same time 250,000 workers entered the work force is a good sign.
The numbers are seasonally adjusted. The number of officially unemployed is now 12.7 million with 5.5 million of those having been out of work for six months or longer. An alternative measure of unemployment called U6 includes part-time workers who want full-time work and some but not all of the millions of people who have become too discouraged to look for work. That number fell slightly to 15.1 percent.
Revisions changed growth in payroll employment for November from 100,000 to 157,000 and in December from 200,000 to 203,000.
The civilian labor force participation rate fell again to 63.7 percent and the employment-population ratio held steady at 58.5 percent.
Here's what the numbers have looked like for the most recent five Januaries:
January 2008: +13,000
January 2009: -820,000
January 2010: -39,000
January 2011: +68,000
January 2012: +243,000
The BLS jobs report is the product of a pair of surveys, one of business establishments and the Current Population Survey of households. The establishment survey determines how many new jobs were added. The CPS provides data that determine the official "headline" unemployment rate, also known as U3. That's the number that is now at 8.3 percent.
Among other changes detailed in today's job report:
• Retail: +19,000
• Constructon: +21,000
• Transportation & warehousing:
• Leisure and hospitality: +44,000
• Mining: +10,000
• Professional & business services +70,000
• Health care: +31,000
• Manufacturing: +50,000
• Government employment: -14,000
• The average workweek (for production and non-supervisory workers) rose to 33,8 hours.
• The average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $23.29. Over the past year such earnings have risen 1.9 percent, compared with an inflation rate of 3.2 percent.
Update: There is no doubt that this is the best job news in quite some time, especially if it keeps up. Some caveats:
In December 2007, there were 5.4 million more Americans on the job than there are now. We're slowly climbing out of that hole. But those aren't the only jobs that are "missing." Every month, thousands of Americans join the working-age population. Different people have calculated that number at 125,000 to 150,000. That means, in the past 49 months since the recession began, between 6.1 million and 7.4 million people would have joined the working-age population. Which, would mean the U.S. economy actually has a jobs deficit not of 5.4 million jobs, but of between 12 million and 13 million.
But, in a phone interview with Daily Kos, Heidi Shierholz, an economist at the Economic Policy Institute, said the working-age population recently has not been growing at the 127,000 level EPI calculated a few years ago but at about 90,000 a month. That's created an additional jobs deficit of 4.4 million, or a total of about 10 million.
Nonetheless, if every person of that 4.4 million had joined the work force in the past four years, as has been the case in the past, and they had not been able to find a job in this very tough economy, the official unemployment rate now would be 10.9 percent.
At the current rate of job growth, and a steady growth of 90,000 additional people entering the working-age population each month, it would take until 2019 to reach full employment again.
Some people say that this fall-off has come about because baby-boomers are starting to retire in large numbers. But, while people in the first wave of baby-boomers turn 66 in 2012, making this is the first year they can collect full Social Security benefits, there is no statistical evidence that large numbers of baby boomers are retiring. But let's take them out of the equation altogether, as Shierholz has done. Writing in early December, she said the following (and posted this grim chart to go with her analysis):
I think the best measure for assessing recent labor market trends is the employment-to-population ratio of 25-54-year-olds, which is simply the share of the age 25-54 population that has a job. [...]
As the figure shows, the labor market plunged dramatically through the fourth quarter of 2009, and then, for the last two years, has basically bumped around at the bottom of that extremely deep hole. In other words, the improvement in the unemployment rate over the last two years, from 10 percent in the fourth quarter of 2009 to 8.6 percent [for November], is due virtually entirely to people dropping out of, or not entering, the labor force — not to a larger share of potential workers finding work. It goes without saying that that kind of improvement in the unemployment rate is not what we’re looking for.
The good news this month is that people did enter the work force in fairly large numbers and the rate still fell.
