For the last month of 2012 the United States Bureau of Labor Statistics reported an additional 155,000 jobs were created. Despite the drama of the “fiscal cliff” crisis in Washington, DC, the unemployment rate in December, 2012 remained unchanged from the prior month at 7.8 percent. The report issued on Friday, January 4, 2013 also recorded that the total number of jobs created in 2012 was 1.84 million.
The report included Labor Department revisions for 2012 which included adjusting the November unemployment rate upwards to 7.8 percent rather than the 7.7 percent originally reported.
All December job creation numbers were largely due to the private sector which added 168,000 jobs during the month. However, government employment shrank with the loss of 13,000 government jobs.
Healthcare, food service and manufacturing showed the largest increases in hiring. In addition, construction employment also rose, but this was most likely due to the need for rebuilding in the Northeastern states that were badly damaged by Hurricane Sandy.
The day before the labor department report, ADP, a payroll processing service, predicted private employers increased their December hiring by 215,000 jobs. Overall December figures revealed only a small gain over 2012’s average growth of 153,000 jobs per month. The job growth for 2012 was the same as it was in 2011. Economists warn that the sluggish job growth is insufficient to improve significantly the unemployment picture.
Behind the Numbers
Traders on Wall Street pretty much had a ho-hum reaction to the jobs report, but many other people are alarmed when looking deep into the numbers.
The damage done by the financial crisis seems to be irreparable as the number of long-term unemployed remains unchanged at 4.8 million people. These long-term unemployed account for 39.1 percent of jobless Americans.
Robert Reich, Chancellor’s Professor at the University of California Berkeley campus and former Secretary of Labor under President Clinton noted in an interview Friday that the labor participation rate, which measures the percentage of people wanting to work who have jobs, stands at 63 percent. This is the lowest level recorded since the measure was implemented.
College graduates are having a very difficult time finding work, but the unemployment rate for those with only a high school education is twice that of college grads. Reich also pointed out that the new jobs are low paying and that the median family income has fallen eight percent since 2000.
The anemic growth in jobs is too slow and the majority of jobs being created are relatively low paying. America’s economy had only one resolution for 2013–that more and better jobs would be created. The question now is whether the 113th Congress will tackle the problem or continue the “do nothing” agenda of the 112th Congress.