Employers Add 200,000 Jobs, Unemployment Lowest in Nearly 3 Years

A burst of hiring in December pushed the unemployment rate to its lowest level in nearly three years, giving the economy a boost at the end of 2011. The Labor Department said Friday that employers added a net 200,000 jobs last month and the unemployment rate fell to 8.5 percent, the lowest since February 2009. The rate has dropped for four straight months.The hiring gains cap a six-month stretch in which the economy generated 100,000 jobs or more in each month. That hasn’t happened since April 2006.

“There is no question that today’s employment report is a positive and there is also no question that the pace of job growth has accelerated of late,” said Dan Greenhaus, an analyst at BTIG LLC, a brokerage firm
A better job market is a positive sign for President Barack Obama, who is bound to face voters with the highest unemployment rate of any sitting president since World War II. Unemployment was 7.8 percent when Obama took office in January 2009.

Still, the level may matter less to his re-election chances if the rate continues to fall. History suggests that presidents’ re-election prospects hinge less on the unemployment rate itself than on the rate’s direction during the year or two before Election Day.

For all of 2011, the economy added 1.6 million jobs, better than the 940,000 added in 2010. The unemployment rate averaged 8.9 percent last year, down from 9.6 percent the previous year. Economists forecast that the job gains will top 2.1 million this year.

The December report painted a picture of a broadly improving job market. Average hourly pay rose, providing consumers with more income to spend. The average work week lengthened, a sign that business is picking up and companies may soon need more workers.

And hiring was strong across almost all major industries. Manufacturing added 23,000 jobs, as did the health care industry. Transportation and warehousing added 50,000 jobs. Retailers added 28,000 jobs. Even the beleaguered construction industry added 17,000 workers. More jobs and higher pay are crucial to helping the economy grow. They could enable shoppers to increase spending, which fuels 70 percent of economic activity.

The economy likely grew at an annual rate of above 3 percent, a healthy pace. Still, the job market has a long way to go to recover from the Great Recession. The nation has 6 million fewer jobs that it did in December 2007, when the recession began. In addition to the more than 13 million who were unemployed in December, a lot of people can’t find full-time work. And many who are unemployed have stopped looking for jobs. The government only counts people as unemployed if they are actively searching for jobs.
When including those groups, the broader “underemployment” rate was 15.2 percent. That’s down from 15.6 percent the previous month, but still high. The figure has dropped for three straight months.
A more robust hiring market coincides with other positive data that show the economy ended the year with some momentum.

Weekly applications for unemployment benefits have fallen to levels last seen more than three years ago. Holiday sales were solid. And November and December were the strongest months of 2011 for U.S. auto sales.

Many businesses say they are ready to step up hiring in early 2012 after seeing stronger consumer confidence and greater demand for their products.

Link to article: http://www.washingtonpost.com/business/economy/sixth-straight-month-of-solid-hiring-expected-when-government-reports-on-december-job-growth/2012/01/06/gIQAv7lMeP_story.html?wpisrc=al_comboNE_b

Weakening Job Market

Rise in unemployment applications indicates weakening job market

by Vanessa Bostwick on June 23, 2011

Nowhere is the fickle economy more evident than in the unstable job numbers, in which an economic snapshot takes shape when jobs data is analyzed, only to change again the following month after a round of fresh data is released.
Another sign of an increasingly weak job market came today, when it was announced that last week the number of people who applied for unemployment benefits climbed by the most in a month.
The Labor Dept. said that unemployment applications rose by 9,000 to a seasonally adjusted 429,000, the second increase in three weeks and the 11th straight week that applications have been above 400,000.
The four-week average for unemployment benefit applications was unchanged at 426,250 last week.
Applications dropped below 400,000 in February and stayed this way for seven of the following nine weeks.
The Washington Post reports that the economy needs to generate at least 125,000 jobs per month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate, which rose to 9.1 percent in May.

“We need initial claims to fall back below 400,000 to signal stronger economic growth than the area we seem to be mired in,” analysts John Ryding and Conrad DeQuadros at RDQ told the Post.