Job growth still sluggish
December’s addition of 103,000 only keeps up with population growth
WASHINGTON – The U.S. economy is steadily adding jobs, but still just barely enough to keep up with the growth of the work force. The weakness underscores the nation’s struggle to get back to something resembling normal employment.
The economy added 103,000 jobs in December, a figure that fell short of what most economists were hoping for. The unemployment rate did come down, to 9.4 percent from 9.8, but that was partly because people gave up looking for work.
“The labor market ended last year with a bit of a thud,” Ryan Sweet, an economist at Moody’s Analytics, said after the Labor Department released its monthly jobs report Friday. He said the drop in unemployment wasn’t likely to be sustained.
Over the past three months, the economy has added an average of 128,000 jobs a month. That’s just enough to keep up with population growth. Nearly twice as many are generally needed to significantly reduce the unemployment rate.
All told, employers added 1.1 million jobs in 2010, or about 94,000 a month. The nation still has 7.2 million fewer jobs today than it did in December 2007, when the recession began.
Some economists predict that the nation will create twice as many jobs this year as it did last year. They note that people who still have jobs are not as worried about losing them as they might have been a year ago, and that people are spending more. A rebound in retail sales probably means businesses will hire more people.
Economists also expect that a tax cut that takes effect this month – a reduction in the amount taken out of workers’ paychecks to pay for Social Security – will also lead Americans to spend more this year.
But even if hiring picks up, the damage from the recession, which has been over for a year and a half, will take years to undo.
Federal Reserve Chairman Ben Bernanke told a Senate panel Friday it could take five more years for the unemployment rate to return to a more normal level of 6 percent. Most economists think unemployment will still be near 9 percent at the end of 2011.