December ends 2011 employment story on good note
2011 ended on a high note for jobs. The December jobs report showed that 200,000 new jobs were created in the month, and the unemployment rate dropped to 8.5, the lowest rate since February 2009. For the year, 1.6 million non-farm jobs were created (1.9 million total, less 280,000 government jobs lost).
Expectations were high for the December employment numbers after the Institute for Supply Management (ISM) employment index jumped to its highest level since June; weekly jobless claims dropped and a strong ADP report on private sector hiring. When the stronger-than expected number hit the wires, you could almost hear the collective “phew” from economists and analysts who have been fooled by these reports in the past.
The trend for jobs is going in the right direction, but like the housing market, there is no magic tonic that will cure the deep, ill effects of the Great Recession. There are still 13.1 million unemployed Americans and the number of long-term unemployed remains at a still-high 5.6 million, or 42.5 percent of the unemployed.
There are glimmers of hope. As Floyd Norris of the New York Times points out, the much-maligned manufacturing sector has been a standout, generating a net gain of about 325,000 jobs since the February 2010 lows. Health care has also seen smart gains in the recovery, adding 315,00 last year. Unfortunately, there are also millions of Americans who don’t possess the skills to land a plum job, so they have fallen back on food services, which added a total of 230,000 jobs in 2011, or have been forced to cobble together low-paying or part-time jobs to make ends meet. The number of people working part-time for economic reasons stands at 8.1 million.
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