Report Says 2011 Ended With Lowered Unemployment and 200,000 New Jobs

Surprising economists and putting an upbeat end to 2011, the U.S. unemployment rate declined to 8.5 percent in December while the economy added 200,000 new non-farm jobs.

It was the fourth consecutive month of declines in the unemployment rate, and the sixth month of six-figure job growth. December’s unemployment rate is the lowest since early 2009.

The official numbers from the U.S. Department of Labor beat all but the most aggressive estimates. Economists were expecting the unemployment rate to rise, and predicted new job numbers in the 150,000 range.

Yesterday, ADP’s monthly employment numbers suggested a January surprise when the company said 325,000 private sector jobs were added in December. Analysts cautioned that the ADP report was not entirely reliable, though they said it pointed in the right direction. This morning’s government report said 212,000 new private sector jobs were added last month.

The U.S. Bureau of Labor Statistics, which compiles and releases the government figures, revised unemployment rates back to January, none by more than .1. November’s initial 8.6 percent was raised to 8.7 percent.

As in the case of the ADP data, seasonal adjustments might be making the jobs numbers somewhat rosier than is actually the case. The New York Times explained that because seasonality takes into account recent year patterns, the drop-off in hiring when the recession began in December 2007 might skew the numbers.

Nonetheless, there is plenty of evidence the economy is continuing to improve. Today’s report said the average workweek for all private, non-farm workers increased to 34.4 hours, while the manufacturing week lengthened to 40.5 hours.

Average hourly earnings rose by 4 cents to $23.24, making the average pay increase for the year 2.1 percent.

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“You got the trifecta — more people working, wages up, and the average work week up,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. to Bloomberg News. “You can’t really argue that that isn’t a sign of significant improvement in the job market.”

Some of the strongest signs are the 23,000 new manufacturing jobs in December, the first significant improvement in four months for that sector. Mining, largely in the petroleum industry, was up by 7,000.  Transportation and warehousing rose by 50,000 thanks in part to strong seasonal hiring during the month.

For the year, the economy added 1.64 million workers; 1.9 million new private sector jobs were created, but government layoffs offset some 280,000. Nevertheless, it was the most jobs created since 2006, and follows the 940,000 increase in 2010.

Still, the economy overall lost 8.75 million jobs in the recession. And even with the declines in the unemployment rate, some 13.1 million workers are out of a job. Another 8.1 million were working part time in December because they couldn’t find full-time jobs. About 2.5 million more are counted as “marginally attached,” a number unchanged in a year. They aren’t included in the official unemployment count because they didn’t look for work during the government’s survey period.

Together, these 23.7 million unemployed and underemployed workers, show there is still a long way to go to get back to pre-recession levels.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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9 Comments on “Report Says 2011 Ended With Lowered Unemployment and 200,000 New Jobs

  1. Thanks again, John. 1.64M net jobs is a good start. At the However (using overly-simplistic math), at this rate it will take us until sometime in 2017 just to make up for the jobs lost in the Great Recession. At double this rate it will still take us until mid 2014.

    Keith

  2. In practically every report I’ve ever read related to unemployment statistics, there always seems to be a mention of unemployed people who are not counted “because they have stopped looking for work.”

    Maybe I’ve missed it along the way, but I’ve never seen how that concept is determined and have never found how that group (if it does exist) is identified in order to define that as their status.

    Some articles mention those who retire or go back to school or take time off to raise families in that category. But, but doesn’t that imply that they are not actually unemployed, but their lifestyle choice at the present time, doesn’t include work?

    I always got the impression that the unemployment stats were formed by new claims filed (during that measurement period) as well as counting those still receiving unemployment insurance. I interpret this means that those who never filed, were never eligible to file or did file but already exceeded coverage (long-term unemployed) are not included. Is that correct?

    If that is the case, then how does anyone know whether or not they have stopped looking for work? I know plenty of unemployed people that ARE looking, and even they ARE NOT, they have never been asked to officially say so one way or the other.

  3. Excellent question @Kelly. The BLS (a division of the U.S. Labor Department) compiles two sets of data for the monthly employment report. They are called the Household Survey and the Establishment Survey. The former is a monthly survey of about 60k households in which about 110k persons participate.

    For the household survey, an individual is counted as being unemployed if all the following are true: they had no employment during the survey week; they were
    available for work at that time; and they made specific efforts to find employment sometime during the 4-week period ending with the survey week. Unemployment insurance payments play no part in determining whether a person is unemployed for the purposes of the BLS report.
    If you want a deeper dive into how the BLS counts employment and calculates job counts check here http://www.bls.gov/cps/cps_htgm.pdf

  4. Keep in mind also that among those who ARE receiving unemployment, many of those ARE NOT looking for work but only make it appear as though they are to continue collecting unemployment payments. The process of “proving you made an effort to find employment” is not one which is actually verified as it is unrealistic to do so. So you count among the unemployed the discouraged who, after say 5 months of actually filling out applications, gave up with no results, but who continue to accept the payment and qualify by simply falsifying their efforts to get a job. The plain fact is this – ALL the numbers are BS…plain and simple. Set up to be easily manipulated to achieve political purposes. Really want to know how bad unemployment is? Do your own survey – how many small businesses have closed up shop in your area? How many people do you know that are unemployed? Those that are employed – ask if it’s permanent or a temp job. Temp jobs disappear quickly more often than not. Go to McDonalds, Wendy’s, or any other “starter job” type business regularly? Take notice of how many of the cashiers, fry cooks, cleaning staff and shift managers are still there 9 months to a year after you first noticed them. I’ve gone to the same McD’s for over 2 years in the morning on my way to work for my Ice Tea – literally see the same people there for that period of time! What does that tell you? The economy sucks and unemployment is high! Judge the economy maybe not by your personal situation but by what you observe around you. Areas of the country are different but you can adjust for that based on what the main focus is in that area. Point is, again, don’t listen to the government!

  5. ANd one more thing Kelly – taking time off to go back to school isn’t usually a “lifestyle choice”. It’s very often a recognition on that person’s part that they no longer have the skills needed for the job they want (or didn’t to begin with) and are actually making the investment they need to get going in the right direction. I wouldn’t call it a lifestyle choice for most of these people, unless you count lowering their “lifestyle” level as a “lifestyle choice” as the cost of the investment usually hits most people pretty hard – especially if they are not even working part time.

  6. @JohnZ – thanks for the explanation and link to the reference materials.

    @JJJS – that point was simply a reflection of how those individuals are described in mainstream media reports that are published regularly. Perhaps that is not the exact terminology that fits every case.

    It certainly wasn’t intended to suggest that the pursuit of continuing education and professional development is not a worthy endeavor. All of us have a responsibility to keep our skills current and competitive.

    Regardless of one’s motivation for doing so, willingly making a decision to “leave the workforce” or “discontinue a job search” or “take time off to go back to school” is a choice and one that does relate to a person’s lifestyle.

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