The US economy got off to a good start in 2012, thanks to a December increase in hiring that exceeded population growth in working-age adults, even after seasonal adjustments. According to the Bureau of Labor Statistics, the economy added 200,000 jobs and the jobless rate dropped by a tenth of a point to 8.5%:
Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining.
The BLS recalculated its seasonal adjustments at the end of the year and re-reported jobless rate results for the last four years. This turned out to be a rather mild recalculation; it raised the rate in more months over the last year than it lowered, but the difference in every month was no greater than a tenth of a point. November’s rate went from 8.6% to 8.7%.
There are a few interesting points to note. Even though the rate of initial weekly jobless claims has declined over the last few weeks, ther has been an increase of 150,000 people unemployed for five weeks or less. The numbers declined slightly in all other time frames, but that’s something to watch. The civilian population participation rate hasn’t changed at all from the 64.0% of last month, which remains the lowest level since the Reagan years and which keeps the jobless rate artificially low. The civilian labor force — all the employed and all those seeking employment — actually declined by 50,000 people since November. However, the U-6 measure of “real” unemployment dropped from 15.6% in November to 15.2% in December, which is the lowest in three years.
It’s a pretty good but not spectacular result. In order to gain jobs, we have to net more than 125,000 jobs added each month. At this rate, it would take 40 months to add 3 million jobs over and above population growth. I’d rather go in that direction than the opposite, but we need a lot more robust job creation than this to get people back to work.