Unemployment drops to 9.4%, but only 103K jobs added

posted at 8:47 am on January 7, 2011 by Ed Morrissey

The nation’s unemployment rate dropped four-tenths of a point to 9.4% in December but the number of jobs added fell short of expectations.  According to the Department of Labor, the economy only added 103,000 jobs, an improvement over the previous few months, but short of the 160,000 economists had been expecting, and far short of ADP’s projection of 297,000.  In another oddity, the number of unemployed fell by five times the number of jobs added:

The unemployment rate fell by 0.4 percentage point to 9.4 percent in December, and nonfarm payroll employment increased by 103,000, the U.S. Bureau of Labor Statistics reported today. Employment rose in leisure and hospitality and in health care but was little changed in other major industries.

The number of unemployed persons decreased by 556,000 to 14.5 million in December, and the unemployment rate dropped to 9.4 percent. Over the year, these measures were down from 15.2 million and 9.9 percent, respectively.

The one explanation for the difference would be an increase in discouraged workers. That number rose from last December by 389,000; November’s figures are not available (the historical data set was down). Also, the civilian labor force participation rate did drop to 64.3%, which indicates that people are still leaving the work force rather than rejoining it.

All in all, this is a disappointing report, even with the drop in the top-line number. For the year, job growth has averaged 94,000 per month, below the level needed to keep up with population growth. For workers and employers, 2010 was a lost year.

Update: The AP doesn’t sugar-coat it, at least not much:

The nation’s unemployment rate dropped to 9.4 percent last month, its lowest level in 19 months. That was because more people found jobs, but also because some people gave up on their job searches.

The Labor Department says employers added 103,000 jobs in December, an improvement from November’s revised total of 71,000 but far below most analysts’ expectations.

Once unemployed workers stop looking for work, the government no longer counts them as unemployed.

According to the DoL numbers, five times more people gave up looking than found jobs, but otherwise this is about right.


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Comment pages: 1 2

Look at the shocking curve of the size of the labor force here: Only 103,000?

Putting the two together the real unemployment rate is up around 16-1/2%

slickwillie2001 on January 7, 2011 at 12:24 PM

Grow Fins is the resident liberal troll that you are substituting for this morning.

You. like she, has no clue about anything but you think if you throw around enough buzzwords people will think you know what you’re talking about.

angryed on January 7, 2011 at 12:23 PM

Yes, yes, “buzzwords”. Facts and reality are “buzzwords”. Try checking links and learning about surveys and statistics, at least you’d know what’s going on since I’m a “troll” and not worth listening to for pointing it out.

jarodea on January 7, 2011 at 12:26 PM

Speaking of trolls, if you read comments you’d see I haven’t once said the numbers were good. I haven’t defended Obama, just trying to educate about how the figures are determined and why its not a “fraud” as many here think since a democrat is in office. And as many thought when a republican was in office, but I doubt they were commenting here much.

jarodea on January 7, 2011 at 12:29 PM

Ed, Michelle Malkin has a good breakdown on what’s happening…

- Unemployment rate dropped by .5% to 9.4%.
- 103,000 jobs were added.
- Underemployment rate increased from 17% to 19%.
- Labor force participation dropped to 25 year low.

Labor force participation delta was ignored in the report even though 3.9 million have dropped out. If this were incorporated into the official numbers, unemployment would stand at 11.7%!!!

dominigan on January 7, 2011 at 12:39 PM

jarodea at 12:24 and 12:29
You have made clear that you are very happy with yourself. If you keep demonstrating that you run the risk of being redundant, about which you criticize others.

GaltBlvnAtty on January 7, 2011 at 12:40 PM

Oops, that should be…

- Unemployment rate dropped by .4% to 9.4%.

dominigan on January 7, 2011 at 12:46 PM

I dont think Jarodea comes off as a troll. Left of center, but not a troll since he (or she?) has come off respectful at least.

As to their remark that I am complaining about two different surveys, they are correct… but what is important *sigh* is why.

I complain about the headline rate (and always have, regardless of whether the number was at 6% or past 10%, or whether Obama or Bush were in office)because there is fine print that is NEEDED to be read, and I dont like spin from the AP or Reuters who fail to take that into account when the number dips, and I dont lile the spin from Fox News when the number increases.

As for my complaint about the U-6 rate, my complaint should be fairly obvious… the number is horrible! Al though there are several “factors” you can use to explain it away, the overall trend is going in the opposite direction it needs to go, and there isn’t quite much, *sigh*, that can be used to explain that away, and several other economists agree.

Finally, as for me stating that you care to brush aside the U-6 rate, I apologize for not elaborating. It is not that you come off as not caring about it, but rather that you are trying to minimize the importance of the rate in your explanation when the overall trend, again, cant really be positively spun. I could be wrong in my interpretation, but surely you can see where somebody like me might get that impression, cant you?

Take care. :)

Indy82 on January 7, 2011 at 12:53 PM

jarodea at 12:24 and 12:29
You have made clear that you are very happy with yourself. If you keep demonstrating that you run the risk of being redundant, about which you criticize others.

GaltBlvnAtty on January 7, 2011 at 12:40 PM

I demonstrate simply that I understand the numbers, I critisize those that don’t. Sorry if it hurts.

jarodea on January 7, 2011 at 12:55 PM

I dont think Jarodea comes off as a troll. Left of center, but not a troll since he (or she?) has come off respectful at least.

Indy82 on January 7, 2011 at 12:53 PM

She? Jarod is a guy’s name last I checked, the last two are my initials. And no, I’m very far right, just obsessed with always being grounded in reality and always seeking simply the best outcomne in whatever situation (even if it’s not far right).

jarodea on January 7, 2011 at 12:58 PM

UNEXPECTEDLY

Egfrow on January 7, 2011 at 12:58 PM

jarodea at 12:58
No pain here, and we recognize that you are sighing frequently while you describe how wonderful you are. We can tell you are feeling good.

GaltBlvnAtty on January 7, 2011 at 1:01 PM

jarodea,

I have a degree in economics and an MBA and worked in IB for several years. I think I know how to read an unemployment report without your help.

And yes the UI numbers are frauds, regardless of who is in office. It is a methodology that was instituted to track an economy that no longer exists. It’s useless. But since it’s the govt it will continue to use it for another 50 years.

angryed on January 7, 2011 at 1:04 PM

She? Jarod is a guy’s name last I checked, the last two are my initials. And no, I’m very far right, just obsessed with always being grounded in reality and always seeking simply the best outcomne in whatever situation (even if it’s not far right).

jarodea on January 7, 2011 at 12:58 PM

You’re not very bright at all. She is referring to Grow Fins, not you. I guess with all the time you spend teaching us little folks about unemployment reports you forgot how to comprehend a basic sentence.

angryed on January 7, 2011 at 1:06 PM

“She? Jarod is a guy’s name last I checked, the last two are my initials.”

Sorry, but people on the net have all sorts of screen names and it is hard to tell if jarodea stands for Jarod, or if it stands for something else. Take my name for example… a lot of people assume I’m from Indiana, whereas I am actually from outside of Chicago and wrote “Indy” to express the fact I’m an Independent. I dont like making assumptions on people based upon their screen names since it is hard to tell what it truly stands for.

Indy82 on January 7, 2011 at 1:06 PM

angryed on January 7, 2011 at 1:04 PM

You should know better than. Though, I’m not too bright so carry on, person who knows about econometrics but doesn’t show it.

Indy82 on January 7, 2011 at 1:06 PM

Sorry, something about being called a chick brings that out in a guy :P.

GaltBlvnAtty on January 7, 2011 at 1:01 PM

Yes, it does fewel good understanding things like this. Sorry you cant, but yeah, it does feel good now that you mention it.

jarodea on January 7, 2011 at 1:19 PM

“fewel”? Male or female? You need to take a couple of deep breaths, at least.

GaltBlvnAtty on January 7, 2011 at 1:23 PM

What is the U6 rate?

El_Terrible on January 7, 2011 at 2:15 PM

The way wel caculate the U# rate is just dumb. So basically the unemployment rate will drop to zero if no one looked for jobs.

Apologetic California on January 7, 2011 at 2:26 PM

Check out delusional Pelosi’s response to the jobs numbers, posted at her website. Note also that the website is not called “Minority Leader.”

Washington, D.C. – Democratic Leader Nancy Pelosi released the following statement today after the Department of Labor released its jobs report for December 2010, showing that the economy added 103,000 jobs, the private sector grew for the 12th straight month, and the unemployment rate dropped to 9.4 percent – the lowest level in 19 months:

“Today’s jobs report provides evidence that the policies of the Democratic-led Congress are helping to create jobs and revitalize our economy – adding more jobs in 2010 than President Bush did over eight years. With so many Americans still looking for work, now is not the time to reverse course.

“Republicans must join Democrats in focusing on putting people to work, instead of making their top priority repealing critical patient protections, putting insurance companies back in charge of the health of the American people and blowing a $230 billion hole in the deficit.‬

‪“Building on the progress of the December jobs numbers – marking the last full month of Democratic leadership of the House – we will continue to measure every proposal by whether it creates jobs, strengthens our middle class, and reduces the deficit.”‬

Reduces our deficit??? Huh?

Nancy, which legislation in your party’s “last full month of Democratic leadership of the House” can you attribute for the these numbers?

onlineanalyst on January 7, 2011 at 2:27 PM

Of course one reason for the job increases was for temporary hires during the Christmas season-many of whom are already back out on the street. We won’t know until next month whether or not this was a critical factor in lowering unemployment rates.

MaiDee on January 7, 2011 at 2:55 PM

Another reason might not be discouraged workers unemployed but the holidays. Not a good time to look for work during December so just dropping out until the new year gets rolling.

chickasaw42 on January 7, 2011 at 4:23 PM

Those are some pretty horrible numbers.

Especially considering they aren’t “seasonally adjusted”.

The Christmas Season traditionally improves the jobless numbers by 1.7 to 2.3 percent. I notice that they haven’t adjusted these numbers to account for this.

So it looks like unemployment went up by over a point to me.

Jason Coleman on January 7, 2011 at 5:18 PM

During the Bush days of 5% unemployment the liberals claimed without facts or documentation, yeah but they’re “McJobs” so no big deal.

Now it’s time to return the rhetoric:
Yeah 9.4% vs 9.8% is still really bad and they’re all icky Obama “McJobs” as well, so it really sucks!

Maybe it’s time for Obama to go on another vacation and write a wonderful speech about how he’s, once again, going to focus like a laser on creating jobs… At least until the end of the speech.

RJL on January 7, 2011 at 8:01 PM

Jarodea, You are definitely a troll. You cannot refute what Angry Ed has pointed out and resort to personal attacks.
I know you can’t, but I would love to see you point out how the numbers aren’t bogus.

Hard Right on January 8, 2011 at 3:29 AM

BTW, simply claiming they are accurate as you have done doesn’t cut it, jackass.

Hard Right on January 8, 2011 at 3:36 AM

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