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
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