Labor Statistics Summary and Analysis for December 2010
So what’s been happening in the labor markets? Here’s my take on the Bureau of Labor Statistics’ monthly employment report.
Isn’t it great to ring in the New Year with some good economic news? The month of December, known for all its holiday glitter, parties, and precious family time, now has something else to be proud of: the beginning of slow, steady job growth. The US economy added 103,000 jobs last month, dropping the unemployment rate to its lowest level in 19 months at 9.4%. And, the increase in consumer spending made this the best holiday season for retailers since 2007.
The number of first-time unemployment applications fell to 425,000, well below the recessionary March 2009 peak of 650,000. But, economists aren’t quite jumping on the “economy is booming” bandwagon. This group says that the weekly applications need to fall to 375,000 or below consistently to really bring down the unemployment to pre-recession levels.
With successive months of positive job growth, we’re taking a step in the right direction. And according to Ben Bernanke, unemployment will likely remain high for the next 4 to 5 years, unless the pace of hiring increases. However, he does feel that there’s evidence of a self-sustaining economy in the works, mainly due to projected increased consumer and business spending.
Show me the numbers …
Jobs increased within leisure and hospitality (+47,000) and in healthcare (+36,000). The temporary professional and business services market continues to add jobs (+16,000) and has risen by 495,000 since a recent low in September 2009. The construction industry accounted for the most job losses (-16,000). Retail trade ticked up a little by 12,000 and manufacturing added 10,000 jobs, while most other major industries remained unchanged.
Among the unemployed, the number of job losers, including contractors that completed temporary jobs, dropped by 548,000 to 8.9 million in December. The number of long-term unemployed (those unemployed for more than 27 weeks) remained at 6.4 million (44.3% of those unemployed).
And those working part-time due to hourly cuts or an inability to find a full-time job (sometimes called involuntary part-time workers) fell slightly to 8.9 million workers (down from 9 million in November). Added to that figure are 1.3 million discouraged workers (up 389,000 from last year), and another 1.3 million workers who are marginally attached to the workforce and not counted as unemployed because they hadn’t searched for work in the four weeks preceding the survey.
But overall, there are numerous signs that the economy is finally moving in the right direction: increased manufacturing production, a growing services sector, and lower unemployment applications. Economists believe that the job market is the lagging economic indicator. Is this a sign that the economy is gaining momentum and hiring is about to accelerate? I’d like to hear your thoughts and ideas. Leave a comment to this post.
Posted by Ray Prendergast, Vice President Sales, Infor WFM Workbrain