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Job Growth Accelerates in December

Source: WSJ


Posted on 06 Jan 2012

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U.S. job growth accelerated and the unemployment rate ticked lower in December, signs of strength for the labor market amid broad economic uncertainty for the new year.

Nonfarm payrolls rose by 200,000 last month, the U.S. Labor Department reported Friday in its monthly survey of employers. Private companies added 212,000 jobs, while the public sector—federal, state and local governments—shrank by 12,000.

The unemployment rate, obtained by a separate survey of U.S. households, sank to 8.5% in December, its lowest level since February 2009. November's rate was revised up to 8.7%.

Economists surveyed by Dow Jones Newswires had forecast a gain of 155,000 in payrolls and a jobless rate of 8.7%.

November's figure for nonfarm payroll jobs was revised down to show a rise of 100,000 from a previously reported 120,000, and October was revised to a 112,000 gain from 100,000.

The latest figures—the broadest snapshot of the labor market—follow other positive readings, including a steady drop in new claims for unemployment benefits.

ll together, the economy has added jobs for 15 consecutive months—since October 2010. But while the latest numbers are broadly positive, the overall pace of job creation hasn't been nearly enough to regain ground lost during the recession.

The economy added 1.6 million jobs in 2011, bringing nonfarm payrolls to about 131.9 million last month. That is roughly 6.1 million less than January 2008, before the recession started damaging the labor market. In total, the downturn and its aftermath wiped out about 8.8 million jobs.

Economists generally believe that the U.S. needs to add more than 125,000 jobs a month just to keep up with population growth.

The Federal Reserve, charged with maintaining stable prices and maximum employment, has remained cautious.

In minutes of the central bank's Dec. 13 policy meeting, released Tuesday, Fed officials noted the U.S. unemployment rate remained high despite a sizable drop in November. Though the U.S. economy looked stronger at the end of 2011, officials worried it could be hit by higher taxes and continued government layoffs in 2012, as well as repercussions from a likely recession in Europe.

ll together, the economy has added jobs for 15 consecutive months—since October 2010. But while the latest numbers are broadly positive, the overall pace of job creation hasn't been nearly enough to regain ground lost during the recession.

The economy added 1.6 million jobs in 2011, bringing nonfarm payrolls to about 131.9 million last month. That is roughly 6.1 million less than January 2008, before the recession started damaging the labor market. In total, the downturn and its aftermath wiped out about 8.8 million jobs.

Economists generally believe that the U.S. needs to add more than 125,000 jobs a month just to keep up with population growth.

The Federal Reserve, charged with maintaining stable prices and maximum employment, has remained cautious.

In minutes of the central bank's Dec. 13 policy meeting, released Tuesday, Fed officials noted the U.S. unemployment rate remained high despite a sizable drop in November. Though the U.S. economy looked stronger at the end of 2011, officials worried it could be hit by higher taxes and continued government layoffs in 2012, as well as repercussions from a likely recession in Europe.

Friday's Labor Department data showed the biggest job gains for transportation and warehousing, which benefitted from seasonal hiring; retail; manufacturing; health care; and food services.

Still, for December there were 13.1 million unemployed, according to the household survey. A broader measure that accounts for both job seekers and part-time workers who would prefer to be working full time—the so-called underemployed—fell to 15.2% from 15.6% in November.

Friday's report shows that Americans' hourly earnings rose by four cents to $23.24. Wages are up by 2.1% over the past 12 months, not keeping pace with overall inflation at 3.4%.


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