by Bill McBride on 1/06/2012 10:01:00 AM
Friday, January 06, 2012
This was a decent report compared to expectations, but it was still weak compared to the number of people unemployed and the high level of unemployment.
There were 200,000 payroll jobs added in December. This included 212,000 private sector jobs added, and 12,000 government jobs lost. The unemployment rate fell to 8.5% from a revised 8.7% in November (revised from 8.6%). U-6, an alternate measure of labor underutilization that includes part time workers and marginally attached workers, declined to 15.2% - this remains very high. U-6 was in the 8% range in 2007.
For the year, the economy added 1.64 million total non-farm jobs or just 137 thousand per month. This is a better pace of payroll job creation than in 2010, but the economy still has 6.0 million fewer payroll jobs than at the beginning of the 2007 recession.
There were 1.92 million private sector jobs added in 2011, or about 160 thousand per month.
Both the participation rate and the employment population ratio were unchanged in December at 64.0% and 58.5% respectively.
The average workweek was increased slightly to 34.4 hours, and average hourly earnings increased 0.2%. "The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.4 hours in December. ... In December, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents, or 0.2 percent, to $23.24. Over the past 12 months, average hourly earnings have increased by 2.1 percent." This is sluggish earnings growth, and earnings are being impacted by the large number of unemployed and marginally employed workers.
There are a total of 13.1 million Americans unemployed and 5.6 million have been unemployed for more than 6 months. Still very grim.
Overall this was a decent report compared to expectations, but still weak given the slack in the economy.
Percent Job Losses During Recessions
Click on graph for larger image.
This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses.
In the previous post, the graph showed the job losses aligned at the start of the employment recession.
Part Time for Economic Reasons
From the BLS report:
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 371,000 to 8.1 million in December.This is the lowest level since January 2009.
These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 15.2% in December from 15.6% in November.
Unemployed over 26 Weeks
This graph shows the number of workers unemployed for 27 weeks or more.
According to the BLS, there are 5.588 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 5.680 million in November. This is still very high, but this is the lowest number since Oct 2009. Long term unemployment remains a serious problem.
More graphs coming ...