December unemployment rates to be released on Friday
Application for unemployment benefits
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JEREMY HOBSON: On Friday we'll get the first big employment report of the New Year from the Labor Department. It'll tell us what the unemployment rate was in December.
Marketplace's Mitchell Hartman has been covering the labor market for us and joins us now with a look at the big picture. Hi, Mitchell.
MITCHELL HARTMAN: Hi Jeremy.
HOBSON: So a year ago at this time, things were pretty bleak. You've been tracking the job market since then -- how far have we come?
HARTMAN: Jeremy, you know compared to last year -- pretty far. The unemployment rate remains high, it's true, but instead of cutting jobs like they were last year, private employers have been adding them. Maybe 100,000 a month on average. That is enough to absorb new workers -- high school and college grads, moms and dads coming off parental leave. The problem is it's not nearly enough to give jobs back to the eight million Americans who got laid off. Many of these people are still unemployed. The time it takes to find a new job is near record highs, so unless we start getting two or three times more jobs added every month, unemployment is going to remain high all year.
HOBSON: But Mitchell, we've been getting some good news from companies recently. Their profits are higher, consumers have started to spend a little bit more. Couldn't that translate into some good news for the job market?
HARTMAN: That's really our best hope. Economist Karen Dynan at the Brookings Institution spun out the best case scenario for me.
KAREN DYNAN: I think what people are looking for is for the pick up in spending to kick start hiring. And if it does, it has the potential to unleash a virtuous cycle really, if we see more job growth, we would see incomes pick up, that would make the higher rate of spending growth sustainable, which in turn would lead to yet more hiring.
HOBSON: Sounds like a pretty good virtuous cycle Mitchell. But what could throw that off track if anything?
HARTMAN: Any number of things. Gas prices for instance, they've been going up. That could spook consumers. And for businesses, even if they are selling more now, they could just cope the same way they've been coping. They get their people to work harder, work longer hours, they hire more temps, without making those people permenant, that's great for their bottom line, not so great for the long term unemployed, and not great for the economy as a whole. In fact, the unemployment rate's now at 9.8 percent. Most economists expect it to still be around 9 percent next January.
HOBSON: Well, we'll see if that prediction comes true. Marketplace's Mitchel Hartman thanks so much.
HARTMAN: You're welcome.