The nation's unemployment rate remained at 7.8 percent in December as payrolls increased 155,000, slightly ahead of consensus forecasts, the ""Bureau of Labor Statistics (BLS)"":http://www.bls.gov/news.release/archives/empsit_01042013.pdf reported Friday. Economists had forecast payrolls would grow by 150,000, slightly higher than the 146,000 increase in payrolls originally reported for November, and that the unemployment rate would remain at November's 7.7 percent.
[IMAGE]Job growth for November was revised upward to 161,000 and for October revised to 137,000 from 138,000.
For the fourth quarter, payrolls grew 453,000 compared with 505,000 in the third quarter, 200,000 in the second and 677,000 in the first.
For the fourth quarter, payrolls grew 453,000 compared with 505,000 in the third quarter, 200,000 in the second and 677,000 in the first.
The report included revisions to the household survey data which measures the unemployment rate. With those revisions, the unemployment rate for November, originally reported as 7.7 percent, was recalculated to 7.8 percent and the unemployment rate for last July was revised down to 8.2 percent from the originally reported 8.3 percent.
The labor force grew 192,00 in December â€" after contracting 258,000 in November â€" as the number of person employed increased a modest 28,000 but the number of people unemployed grew 164,000 but the number of “reentrants†to the labor force, that is individuals confident enough to resume looking for work, grew 262,000, a positive sign. According to the BLS, an individual has to meet three tests to be classified as “unemployed†â€" out of work, available for work, and looking for work.
The labor force participation rate, tracking those above the age of 16 who are either employed or unemployed (as defined) was flat at 63.6 percent. It was 66.0 percent when the recession began five years ago. The employment-population ratio, measuring the percentage of all those over 16 who are employed fell to 58.6 percent in December from 58.7 percent one month earlier. It was 62.7 percent in December 2007. The inverse of the ratio â€" 41.3 percent â€" represents the percentage of all those over 16 who are not working, but includes those who might be in school or who not be available for work. That “unemployment rate†was 37.3 percent when the recession began.
The unemployment rate took on added significance with the announcement by the Federal Reserve that the target fed funds rate would remain at its historic low, 0 to ¼ percent, at least until the unemployment rate fell below 6.5 percent. The Fed also set an inflation target for keeping rates low.
Private sector payrolls grew 168,000 in December, but overall growth was held back by a 13,000 cut in government payrolls.
[COLUMN_BREAK]While the number of state government jobs grew 4,000, the number of local government jobs dropped 14,000 and the number of federal jobs fell 3,000.
Average weekly hours rose to 34.5 from 34.4 in November and just below the 34.6 hour average workweek when the recession began in December 2007. As part of a strategy to weather the economic storm, some businesses reduced working hours rather than lay off workers so the businesses would be primed to take advantage of a recovery. Returning to the pre-recession average work week is a necessary prelude to adding jobs.
Average hourly and weekly earnings also rose in December with the result that average aggregate earnings in December were up 3.4 percent year-over-year a data point which could fuel personal consumption spending which is about 70 percent of the nation’s gross domestic product.
While the number of payroll jobs grew, the number of multiple job holders declined which means that unlike reports for October and November, all the new jobs went to individuals who were previously jobless. In November, while jobs went up 161,000, the number of multiple jobholders increased 182,000.
Within the “establishment survey†which tracks jobs by industry, the education and health sector added 65,000 jobs â€" 55,000 of which were in health care and social assistance â€" and the number of construction jobs grew 30,000. There were also 25,000 new manufacturing jobs according to the report. The number of leisure and hospitality jobs grew 31,000 â€" all in restaurants.
The number of retail jobs fell 11,300 as job losses at clothing stores overwhelmed new jobs in the auto sector. With the end of the holiday shopping season, the number of “courier and messenger’ jobs dropped 10,800.
While the financial sector added 9,000 jobs, there were 2,500 fewer “credit intermediation†â€" underwriting â€" jobs at commercial banks.
The number of temp jobs, considered by some to be a leading indicator of direction of overall payroll employment, dropped slightly in December but that more likely means employer confidence has increased to the point at which new jobs can be permanent rather than temporary.
The ranks of the long-term unemployed â€" those out of work for 27 weeks or longer â€" dipped slightly to 4,766,000, the lowest level since June 2009, but all other categories of the duration of unemployment -- less than five weeks, 5 to 14 weeks and 15 to 26 weeks -- increased.
The number of “job leavers†which includes those who quit one job to look or take another, a sign of confidence, rose 57,000 in December while the number of job “loser†fell 21,000.
The unemployment rate among women rose to 7.3 percent in December from 7.0 percent in November while the unemployment rate among men was flat at 7.2 percent. The unemployment rate among blacks rose sharply to 14.0 percent from 13.2 percent in November as the unemployment rate among Hispanics fell to 9.6 percent from 9.9 percent.
Teenage unemployment remained stubbornly high though the rate for December, 23.5 percent, was down from November’s 23.6 percent. The unemployment rate for college graduates â€" a key housing demographic since college graduates are more likely to be homeowners â€" was unchanged in December at 3.9 percent.
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