Job Creation Weaker Than Expected, Jobless Rate Falls to 9.4%
Since November 2009, when new job creation first took a baby-step into positive territory after nearly two years of disastrous news for working Americans, there have been a lot of crossed fingers in the days before the Bureau of Labor Statistics releases its monthly employment report. Throughout the period, many analysts have repeatedly predicted that this time, this month, finally, we'd see a big breakthrough in the economic measurement that matters most to working Americans, or those who would be working if they could find employment. Hopes were especially high for today's report. Once again, it failed to deliver.
Seasonally adjusted, the BLS business establishment survey showed that 103,000 new jobs were created in December. That was 113,000 private-sector jobs and a loss of 10,000 government jobs. The expert consensus – which had risen Thursday after release of a private company's stunningly positive job report – was for 150,000 new jobs, with some analysts saying there would be a lot more. Job-creation numbers for October and November were revised significantly upward today, from 172,000 to 210,000 and from 39,000 to 71,000, respectively. The ranks of the officially unemployed fell from 15.1 million to 14.5 million.
The unemployment rate, which is based on a different survey, fell to 9.4 percent, the lowest level in 19 months. This marks the first month in 17 that unemployment has been lower than 9.5 percent. Some analysts see that as a fluke caused by seasonal hiring. Others see it as a precursor of better months to come. At least part of the reason for the drop in the unemployment rate was that the labor force fell by 260,000. If they had stayed in the labor force, today's rate would have been 9.6 percent.
The civilian labor force participation rate, which has been drifting downward for the past three years, fell to 64.3 percent. The population participation rate rose slightly to 58.3 percent.
The number of workers who have been unemployed for six months or more rose from 6.3 million to 6.4 million.
U6, an alternative BLS measure that takes into account the unemployed, part-time workers who want full-time jobs and discouraged workers who have sought a job in the past 12 months but not in the past four weeks fell to 16.7 percent.
Marty Feldstein, the president emeritus of the official arbiter of when recessions begin and end - the National Bureau of Economic Research - told CNBC this morning that the jobs numbers are still "not good enough" because they barely keep up with population growth.
Attention (and crossed-fingers) will now shift to the February jobs report.
While many analysts have grown more optimistic about the economy in the past several months, it's still likely the unemployment rate will be above 9 percent at the end of 2011, and above 8 percent at the end of 2012.
Among other statistics from today's jobs report:
• The jobless rate: for adult men (9.4 percent); for adult women (8.1 percent); for teenagers (25.4 percent); for whites (8.5 percent), blacks (15.8 percent); Latinos (13 percent); Asians (7.2 percent). Rates for American Indians are larger than all these but not included because the survey sample is not large enough to accurately gauge this demographic.
• The number of people employed part-time because they can't find a full-time position fell from 9 million to 8.9 million.
• The average workweek for all employees on private nonfarm payrolls held steady at 34.3 hours. Average hourly earnings rose 3 cents to $22.78.
• In professional and business services, employment in temporary help services was up 16,000.
• Leisure and hospitality: +47,000
• Health care: +36,000
• Mining: +5,000
• Retail trade: +12,000
• Manufacturing: +10,000
• Construction: -16,000