January 6, 2012 in News, Nation/World

Unemployment rate falls to 8.5 pct., hiring surges

Associated Press

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 increased across most 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.

Economists cautioned that some of the gains reflected temporary hiring for the holiday season. The government adjusts the figures to account for those seasonal factors, but doesn’t always fully account for them.

The gains in transportation and warehousing, for example, reflected a strong increase in hiring for couriers and messengers. That could stem from a big jump in online shopping over the holidays, the department said.

The nation’s work force, which includes both people working and those searching for jobs, shrank slightly last months and is little changed from this spring. That’s a concern because a strengthening job market normally draws more applicants.

The work force has declined by about 160,000 over the past two months, one reason the unemployment rate has fallen.

“You have to take that unemployment rate decline with a grain of salt when you look at the declines in the labor force,” said Marisa DiNatale, an economist at Moody’s Analytics.

The government only counts people as unemployed if they are actively searching for jobs. Discouraged workers who have given up on looking are not included in the rate.

And some of those who are counted as employed are working part time, but want full-time work.

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.

And 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.

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.

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.

42 comments on this story so far. Add yours!

Scoutster on January 06 at 7:08 a.m.
OX8
I don’t think Obama is responsible for this, or for the higher rates earlier. That’s not how it works, but in our reality TV world most people think so.
It will be fun to watch the Faux News Talking Heads, who blame O for everything from jock itch to low tire pressure spin this.
lewis8457 on January 06 at 7:20 a.m.
surges that is funny wasn’t it just a few weeks ago you ran a story bout the only new jobs for spokane were 300 from Caterpillar and 250 from providence? 550 new jobs in the entire city, including liberty lake and cheney i don’t call that a surge.
huskerinwa on January 06 at 7:22 a.m.
Blame Obama!
dataxman on January 06 at 7:26 a.m.
Scout - this article is spin…
The unemployment rate is falling because workers are dropping out of the labor pool. The unemployment rate measures those available for work - but not working. According to the BLS, the labor participation rate is at 64% - the lowest level since 1984. U6 - which represents both unemployed and underemployed is 15.2% - and that doesn’t count the 36% of workers who have given up.
We need 300,000 new jobs each month just to absorb new entrants into the job market. So any month when we have less than that - and the rate still falls - you know the gov’t is playing with the numbers
pmbrown49 on January 06 at 8:14 a.m.
dataxman, you may be right. What I’m trying to get a grip on is that 30 days ago members of Congress (more Dems than GOP) were worried people unemployed 99 weeks or more were going to suffer tremendously if the payroll tax legislation wasn’t passed and their benefits would be cut off. Congress cited there were “hundreds of thousands” of unemployed workers that would be affected if another 20 weeks on unemployment checks weren’t coming. Say wa?
That’s when I start to believe alot of this is “feel good” spin.
And now this morning we hear on the national news shows that retailers had a pretty tough holiday sales season because they had to discount prices so far to get people in to buy.
schleufer on January 06 at 8:28 a.m.
go to john boehners web site and see who they blame for it. even reciently when it dropped to 9% they were blaming obama. at this rate it will get to 8% then what? after years of obstruction i suspect the republicans will step up and take credit.
Charlie on January 06 at 8:38 a.m.
The Senate controlled by Harry Reid-D is the obstruction in congress. The first two years of BHO’s reign was completely controlled by the D’s and unemployment still shot up to 10%. How many bills have been sent over from the house just to die on Harry Reid’s desk, all of them! Fire all 535 and start from scratch.
detroitdude on January 06 at 8:42 a.m.
LOL we could have 0% unemployment and folks would still spin it into some sort of failure by Obama.
william1977 on January 06 at 8:46 a.m.
How anyone can read this and take it as fact- is just absurd. It is a lie- it all is…
how many people do you know who are under-employed..? exactly.
The base cause is the tax code and the pressure on the small businessman. Eliminate the code… zero corporate tax and flat consumption tax.
let people keep their income, and be taxed on what they buy. then the country can be run on that.
the money will pour in…jobs will be abundant!
de3 on January 06 at 9:06 a.m.
Dataxman is correct. The WSJ has a story this morning that Caterpillar, in a wage dispute with its Canadian plant workforce, is citing that salaries at their US plant are about half those at their Canada plant. And then goes on to say that the US is becoming more competitive because pay is going way down in the U.S. as everyone but bankers is worse off and there is a surplus of workers here.
Probably not the hope and change we were looking for.
Pigrobin on January 06 at 9:29 a.m.
DD, spin or no spin, Obama is the president. When things aren’t going well, the guy at the top will be saddled with the blame. It comes with the territory. And that’s why every republican running against him is a viable candidate, no matter how much you think they are unqualified. When the economy sucks, the people will look for change. The one thing going for Obama is 10 months is a long time.
johnclarke on January 06 at 9:48 a.m.
Here, let me see if I can sum up the wing nut position.
1) I hate President Obama.
2) Obama is only responsible for bad news.
3) Everything Obama does is to help his reelection.
Jeffrey_Grey on January 06 at 9:55 a.m.
johnclarke,
I would state your “2)” a little differently:
2) Obama is responsible for anything and everything that goes wrong, but is not responsible if the exact same thing goes right.
(It’s the opposite of the rule that held during Bush’s administration - He was responsible for the success when it went right, but it was always someone elses’ fault when things went bad.)
‘Heads I win, tails you lose.’
Scoutster on January 06 at 10:00 a.m.
dataxman
You are right about the number being an unrealistic gauge of true employment.
Just as the DJIA is not reflective of the health of the economy.
But it’s simple fast food requiring zero analysis, and that’s what Americans and their partisan pundits love.
And, no, they don’t cook the books. That’s nonsense. It’s just the things we count no longer reflects the employment world most of us live in now. Govt statistical modeling is a laggard.
Pigrobin on January 06 at 10:08 a.m.
JC, let me sum up the US citizen’s position. Obama is president and the buck stops with him…like it or not. Anything else is rubbish.
meadman on January 06 at 10:11 a.m.
amazing the “spin” put on this by posters here — and, of course, the spin is totally dependent upon whether they support Obama or not – it would be so refreshing to see some fact-based discussion and realistic comments rather than pure partisan crap – this is exactly what is wrong with Congress and the entire political system: no one cares about verifiable facts or what is best for the country, all that matters is putting your particular talking points on display to try to get your guy elected.
Bruce (aka thatoneguy) on January 06 at 10:44 a.m.
Good news = either it’s a lie fabricated by Obama & his supporters or, if it’s actually true, it’s in spite of his efforts and not because of them.
Apparently what we need is a President who hates America as much as Obama does.
Pigrobin on January 06 at 10:47 a.m.
Meadman…facts and politics, there’s an oxymoron. Facts are in the eye of the beholder.
johnclarke on January 06 at 10:51 a.m.
Pigrobin on January 06 at 10:08 a.m.
JC, let me sum up the US citizen’s position. Obama is president and the buck stops with him…like it or not. Anything else is rubbish.
I agree completely, except for one minor snag. Laws need to go through those things called The “House and Senate”. However if you pay attention you will note the President using executive power lately, because he is a little sick of being obstructed.
So I guess you will be congratulating the Pres on these lower unemployment numbers correct? After all the buck stops with him right ?
johnclarke on January 06 at 10:56 a.m.
Jeffrey_Grey on January 06 at 9:55 a.m.
Heh. Let me post my favorite all time Bushism.
“He kept us safe from the terrorists”
I give this whole topic a giant yawn. The economy will recover and Obama will coast to another victory….and in closing let me add Bin Laden. He’s dead.
Pigrobin on January 06 at 10:58 a.m.
Yes, I will most definitely congratulate him for things trending good even if he promised me much more. It doesn’t mean we won’t kick him to the side of the road if the economy continues to limp along. Thems are the facts and no amount of spin or hype will change them.
liberal_in_right_wing_land on January 06 at 10:59 a.m.
Funny watching the republicans flop around like fish on beach now that things are improving in the country. Spin it anyway you want tea baggers, this is good news and only is going to help Obama get re-elected, everyday that passed your chances of winning 2012 shrink.
And Pigrobin, sorry no republican candidate you guys are running is viable. 75% of the republican party still cannot vote for Mitt Romney because he is mormon. Newt is so damaged by his time as Speaker of the House and the baggage he carries with him from that and then his time as a lobbyist out of office, and his multiple marriages, he never will win. Rick Santorum, well he couldn’t even when his own senate re-election and his views against anyone not male, rich and white (and especially against gay people) are so out of the mainstream he will NEVER attract the independent voters needed to win.
drywitt99 on January 06 at 11:15 a.m.
During the first 34 months of President Obama’s FIRST term unemployment rose by .9%…….from 7.6 to 8.5.
DOWN .6% over the past six months.
During the final 34 months of President Bush’s second term unemployment rose by 2.9%…..from 4.7 to 7.6.
Can anyone say SECOND TERM???
Shadedmuse on January 06 at 11:23 a.m.
The ression is over, exept in Spokane what will always be stuck in a depression because Spokane is a NON growth backwards tea-bagger town.
Obama will be re-elected because he has clowns and flip floppers and Rick the earmark king Google santorum running against him.
johnclarke on January 06 at 11:35 a.m.
Pigrobin on January 06 at 10:58 a.m.
Yes, I will most definitely congratulate him for things trending good even if he promised me much more. It doesn’t mean we won’t kick him to the side of the road if the economy continues to limp along. Thems are the facts and no amount of spin or hype will change them.
What did he promise you ? Did you vote for him ?
pmbrown49 on January 06 at 11:49 a.m.
“The ression is over, exept in Spokane what will always be stuck in a depression because Spokane is a NON growth backwards tea-bagger town.”
That’s a bit harsh, don’t you think? Spokane is more of a service sector economy which typically tend to lag behind Metropolitan Service Areas that have more engineering/manufacturing jobs. Bill Gates has said as much when he was once asked why he didn’t have a Microsoft campus in Spokane. He cited the lack of an engineering school in the area and the lack of qualified engineers in Spokane.
Spokane gets service sector “opportunities” like a 250-person call center (Providence) because that’s where there is an abundant supply of workers. These are typically low wage jobs. I fail to see what the tea-baggers have to do with this. It’s really a function of qualified workers, not political ideaology.
pmbrown49 on January 06 at 11:50 a.m.
I meant Metropolitcan Statistical Areas, not “Service” areas.
Shadedmuse on January 06 at 12:00 p.m.
Service sector means Bar and restraunt and selling cheap crap and cleaning up other peoples mess ie janitorla and security guards jobs, if that is the future of Jobs in Spokane i’m out of here, Wait a minute i already left. Goodbye all you will mnever ever see Shadedmuse no More, GOODBYE AND FOOF RIDENCE!!!!!!!
Pigrobin on January 06 at 12:13 p.m.
JC, it doesn’t matter who voted for the guy in power. He’s our president and he speaks to all of us. We also have the power to terminate his current employment if he doesn’t live up to our expectations. I’m starting to see your frame of reference as limited as it is.
johnclarke on January 06 at 12:50 p.m.
Pigrobin on January 06 at 12:13 p.m.
JC, it doesn’t matter who voted for the guy in power. He’s our president and he speaks to all of us
Well, he sure tries to. In fact, Obama has been a rather moderate President to date, if you look at the facts.
My frame of reference is called facts and data pal. If you don’t like being called out on what you post, I’ll save myself the trouble.
lewis8457 on January 06 at 1:23 p.m.
i have been on unemployment for 11 months and was told as of jan, 28th there is no more money so i will be one of thousands that will no longer be counted.
unemployment is so bad Hollywood is making sitcoms about people out of work.
in December they report consumer spending is up and we are in recovery as if we area all too stupid to realize it was Christmas season.
the president, congress and senate don’t care they are all millionaires.
greenlibertarian on January 06 at 1:31 p.m.
Unmentioned, AGAIN, is the one CLEAR pattern we’ve seen in 2 years or so of anemic recovery:
GOVERNMENT JOBS DECLINING AT ALL LEVELS.
Why aren’t the teabaggers championing this trend? Because it’s opposite of their (false) stated agenda that government is getting bigger and bigger.
Well if it is, they’re doing it with FEWER AND FEWER employees.
Brutal losses in state and local jobs
By Tami Luhby @CNNMoney January 6, 2012: 3:08 PM ET
NEW YORK (CNNMoney) — Nearly 250,000 state and local government employees lost their jobs in 2011, with the ax falling particularly hard on public school teachers.
And the bleeding is likely to continue in 2012, experts say.
These numbers stand in stark contrast to the private sector, which gained 1.6 million. The December unemployment rate fell to 8.5% after the economy added 200,000 jobs, the Labor Department reported Friday.
Things were not as rosy in the public sector. Some 181,000 local workers and 63,000 of their state peers were let go last year as the economic downturn continued to wreak havoc on government budgets. Teachers accounted for 113,000 of those losses.
:
Some 14,000 local workers got pink slips in December, the same number as in November and 5,000 more than in October. About 9,000 of these were educators.
And the trend isn’t likely to stop in 2012, as municipalities and some states continue to struggle. City finance officers are projecting more spending cuts — largely coming from personnel reductions — this year, according to a National League of Cities survey. (continues)

http://money.cnn.com/2012/01/06/news/economy/state_local_jobs/?hpt=hp_t2
pmbrown49 on January 06 at 1:49 p.m.
greenlibertarian, you are right about the reversal in Federal Government job growth in the last 2 years, but in Obama’s first year and a half he was growing the size of Federal job growth, even using stimulus money to do so. This stopped at the mid-term elections when the national electorate said “enough already”. This is one of the key reasons why the GOP took back control of the House.
–––––––––––––––-
By Matt Kelley, USA TODAY (9/23/2009)
WASHINGTON — The $787 billion economic recovery package also is stimulating growth in the federal government as agencies hire thousands of workers and spend millions of dollars to oversee and implement the package, according to government records and spokesmen.
Fourteen of the top federal agencies responsible for spending under the American Recovery and Reinvestment Act say they’ve hired about 3,000 workers with stimulus money. That’s helped fuel the continued growth of the federal government, which increased by more than 25,000 employees, or 1.3%, since December 2008, according to the latest quarterly report. During that time, the ranks of the nation’s unemployed increased by nearly 4 million, Labor Department statistics show.
Coffee on January 06 at 2:11 p.m.
greenlibertarian on January 06 at 1:31 p.m.
I do not see the problem in that.
Why should it be only private sector workers that have to reduce their standard of living?
Pigrobin on January 06 at 2:13 p.m.
JC, I missed whatever it was you called me out on. If I’m your pal, you owe me a beer.
Diana on January 06 at 2:14 p.m.
@Charlie, when someone moos and whines, “The first two years of BHO’s reign was completely controlled by the D’s”, I can tell they don’t think for themselves.
The majority only lasted 6 months. Election 2008 gave Democrats a total of 58 Democratic Senators. Spector switched parties in April, which brought the count to 59. Sen. Franken didn’t get sworn in until July 7, 2009, which is when the count went up to 60. Ted passed in August, and his replacement was named at the very end of September, and replaced with a Republican in January.
Oh, and by the way, the economy was bankrupted in 2008. Under Bush. Before the election.
Bruce (aka thatoneguy) on January 06 at 3:04 p.m.
shadedmuse at noon:
“GOODBYE AND FOOF RIDENCE!!!!!!!”
That’s a classic, even for you : ) Best wishes in your new job & new town.
pmbrown49 on January 06 at 4:25 p.m.
“Oh, and by the way, the economy was bankrupted in 2008. Under Bush. Before the election.”
Diana, please refresh my memory when the USA declared bankruptcy? I must have been living under a rock when that happened because I sure don’t remember it.
johnclarke on January 06 at 4:30 p.m.
pmbrown49 on January 06 at 1:49 p.m.
greenlibertarian, you are right about the reversal in Federal Government job growth in the last 2 years, but in Obama’s first year and a half he was growing the size of Federal job growth, even using stimulus money to do so. This stopped at the mid-term elections when the national electorate said “enough already”. This is one of the key reasons why the GOP took back control of the House.
omg, that last sentence is the biggest stretch since “bush kept us safe”. Everyone was using that money to hire, including Republican governors like Mr. Butch Otter. They funded existing state employee payrolls with it. That was one of the goals of the entire concept, to keep people working, and to hire more. You might want to check out the growth of gubmint under Reagan and Bush Jr. Also, take special note of the explosion of hiring for “Homeland Security”. Do you really think that Republican voters are informed enough to know these things? Bah.
greenlibertarian on January 06 at 6:45 p.m.
Actually, I didn’t mention a DAMN thing about Obama or FEDERAL employment, the article I quoted very clearly talked about LOCAL AND STATE GOVERNMENT positions, which are down 250,000.
If anyone cared to read the rest of the article I linked to, instead of some asinine completely IRRELEVANT 2009 USA Yesterday article, you’d have found this:
Federal workers, meanwhile, have not fared as badly. They lost only 36,000 jobs last year, with the vast majority of them coming from the U.S. Postal Service, which is on the brink of insolvency.
The federal work force peaked in mid-2010 due to the census jobs, and has been dropping EVERY MONTH since.
Aren’t there ANY conservative posters here who can make a SINGLE LOGICAL, COGENT argument?
arroyoribera on January 08 at 7:35 p.m.
An increase of 200,000 jobs/month per state equals 4,000 jobs/month per state which in turn equals 102 jobs per each of Washington states 39 counties (in May and June 2011 combined it was 36 jobs per county). Spokane county’s population is about 2.74 times the size of the average Washington state county so its share of 200,000 jobs nationwide is about 279 jobs. There are some 18,800 unemployed in Spokane county, using DOL September 2011 numbers. Assuming (major assumption) that this growth can be sustained, we are a long way from acceptable unemployment. We can talk about which of the two ruling class parties is responsible or which will do a better job of trying to rescue capitalism. In the end the problem is that continued growth is possible but unsustainable in terms of population, pollution, resources, and human well-being. Yes, the exact nature of the alternative is not clear. But the boom and bust cycles of our capitalist-imperialist system with the accompanying wars of aggression, human suffering, and despair are not worthy of another round of renewed faith. The system is run by the same managers (bankers, politicians, etc) who dragged us to the edge of the economic abyss into which we continue to look. If you have doubts, visit the lobby of one of the states welfare offices, speak to those running soup kitchens, or those assisting the homeless.
http://spokaneeconomicindicators.wordpress.com/
David Brookbank
arroyoribera on January 08 at 9:41 p.m.
Correction: Obviously my first sentence above should read: “An increase of 200,000 jobs/month nationally”, not per state.