CommunityFDL Main Blog

Just 103,000 Jobs Added in December, but Topline Unemployment Rate Drops to 9.4%

photo: jrmyst via Flickr

A bit of an odd jobs report for December from the Bureau of Labor Statistics. The economy added only 103,000 jobs in December, which is far less than what was predicted by the ADP Private Employment Survey earlier in the week, which showed much more of a hiring surge. However, the unemployment rate dropped 0.4%, to 9.4%. How?

Well, like in many December reports, the rate and the number of unemployed persons gets substantially revised at the end of the year. As a result, the all the way back to January 2006 was subject to revision. That’s how you get a statement like “the number of unemployed persons decreased by 556,000 to 14.5 million in December.” 556,000 people didn’t get jobs in a month, they just revised the overall data.

This makes it hard to extrapolate much from the survey, but we can say some things. First of all, despite that drop in the number of unemployed persons, the long-term unemployed number remained the same, at 6.4 million. 44% of all the unemployed are now “long-term unemployed,” and I think under the BLS definition that means 6 months or more. The employment-population ratio was also unchanged, at 58.3%.

We closed out 2010 with a net increase of 1.1 million jobs. If you think about the total unemployed, and increases in the total population rate, you see how long it will take to reach what amounts to full employment. 100,000 here and there won’t do it.

Employment was revised upwards for October and November:

The change in total nonfarm payroll employment for October was revised from +172,000 to +210,000, and the change for November was revised from +39,000 to +71,000.

I’m sure people will focus on that topline unemployment rate, but really this report shows we’re still just moving sideways on jobs. And of all the bills put forward in this Congressional session thus far, pretty much none of them deal with that reality.

…Oh, and meanwhile, corporations had their most profitable quarter in history at the end of 2010. Trickle down!

CommunityThe Bullpen

Just 103,000 Jobs Added in December, but Topline Unemployment Rate Drops to 9.4%

A bit of an odd jobs report for December from the Bureau of Labor Statistics. The economy added only 103,000 jobs in December, which is far less than what was predicted by the ADP Private Employment Survey earlier in the week, which showed much more of a hiring surge. However, the unemployment rate dropped 0.4%, to 9.4%. How?

Well, like in many December reports, the rate and the number of unemployed persons gets substantially revised at the end of the year. As a result, the all the way back to January 2006 was subject to revision. That’s how you get a statement like “the number of unemployed persons decreased by 556,000 to 14.5 million in December.” 556,000 people didn’t get jobs in a month, they just revised the overall data.

This makes it hard to extrapolate much from the survey, but we can say some things. First of all, despite that drop in the number of unemployed persons, the long-term unemployed number remained the same, at 6.4 million. 44% of all the unemployed are now “long-term unemployed,” and I think under the BLS definition that means 6 months or more. The employment-population ratio was also unchanged, at 58.3%.

We closed out 2010 with a net increase of 1.1 million jobs. If you think about the total unemployed, and increases in the total population rate, you see how long it will take to reach what amounts to full employment. 100,000 here and there won’t do it.

Employment was revised upwards for October and November:

The change in total nonfarm payroll employment for October was revised from +172,000 to +210,000, and the change for November was revised from +39,000 to +71,000.

I’m sure people will focus on that topline unemployment rate, but really this report shows we’re still just moving sideways on jobs. And of all the bills put forward in this Congressional session thus far, pretty much none of them deal with that reality.

…Oh, and meanwhile, corporations had their most profitable quarter in history at the end of 2010. Trickle down!

UPDATE: More from Dean Baker.

Previous post

On Gate-Keepers and Pragmatists

Next post

Krauthammer And Conservative "Constitutionalism"

David Dayen

David Dayen