Nation’s Unemployment Rate Falls to 9.4%

The unemployment rate in the United States slipped to 9.4 percent in December, as employers added 103,000 jobs to their payrolls, ""according to figures released"":http://www.bls.gov/news.release/empsit.nr0.htm by the Department of Labor Friday.

[IMAGE]

That’s down from a rate of 9.8 percent in November and a rate of 9.6 percent in each of the three months prior. A year earlier, the unemployment rate was 9.9 percent.

Keith Hall, commissioner of the Bureau of Labor Statistics, says from the recent low point in December 2009, payroll employment has risen by 1.1 million, or an average of 94,000 per month.

Experts agree that job growth is vital to any meaningful improvement in the housing and mortgage markets. While the nation’s unemployment rate is ""expected to remain elevated"":http://dsnews.comarticles/nations-unemployment-picture-expected-to-improve-2010-12-23 and above the 9 percent mark through most of 2011, any decline is certainly a good start.

Still, the December figures came in lower than analysts were anticipating. Paul Dales, senior U.S. economist for the research firm ""Capital Economics"":http://www.capitaleconomics.com, described the report as a “bitter disappointment.”

[COLUMN_BREAK]

“The 103,000 increase in U.S. payroll employment in December is very disappointing after the spectacular 297,000 gain touted by the ADP survey,” earlier this week, Dales said. “We always thought that looked too good to be true at a time when all the other indicators had improved only modestly. But December's actual increase still fell well short of our post-ADP forecast of 175,000 and even our pre-ADP forecast of 130,000.”

Economists surveyed by ""_MarketWatch_"":http://www.marketwatch.com/story/us-unemployment-rate-falls-to-94-in-december-2011-01-07-830130?reflink=MW_news_stmp had forecast a 175,000 increase in jobs, while a panel polled by ""_Bloomberg News_"":http://www.bloomberg.com/news/2011-01-07/u-s-adds-fewer-than-estimated-103-000-jobs-unemployment-declines-to-9-4-.html had forecast a median 150,000 new jobs.

The Labor Department report shows that it revised its estimates of job growth upward for the previous two months. The latest figures show 210,000 new jobs were added in October instead of 172,000, while 71,000 jobs were created in November as opposed to the 39,000 previously reported.

The lion’s share of new jobs in December, as well as the preceding months, came from private companies. In December, employment increased in leisure and hospitality and in health care but was little changed in other major industries, the Labor Department said.

Hall says the number of unemployed persons also declined over the month, from 15.0 million to 14.5 million. Among the unemployed, 44.3 percent had been jobless for 27 weeks or more as of the end of December.

The number of discouraged workers grew over the course of last year by 389,000 to 1.3 million in December, according to Hall. He explained that “discouraged workers” are persons outside the labor force who are not looking for work because they believe their job search efforts will be unsuccessful.