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January 06, 2006

108,000 Jobs Created; Unemployment Drops to 4.9%

They're painting it as a mixed jobs report, but it's actually pretty positive:

Job growth slowed in December β€” following a big hiring spurt in November β€” with employers expanding payrolls by 108,000, underscoring the sometimes choppy path traveled by job seekers.

The Labor Department's fresh snapshot of the nation's jobs climate, released Friday, also showed that the unemployment rate dipped from 5 percent in November to 4.9 percent in December, as some people left the labor market for any number of reasons.

The 108,000 gain in payrolls registered in December followed a big pickup of 305,000 jobs added in November, according to revised figures released Friday. That was the most since April 2004 and was even stronger than the 215,000 job gains first estimated for November a month ago.

For all of 2005, the economy added 2 million jobs β€” a solid amount and about the same as the year before. The unemployment rate averaged 5.1 percent last year, an improvement from the 5.5 percent average registered in 2004.

So, there were 108,000 new jobs added in December, plus an additional 90,000 jobs added in November we previously didn't know about. These numbers are almost always adjusted upwards; since I've been posting about this the first friday of every month, I've only seen them adjusted downwards two or three times, and upwards about one half the time.

This:

...the unemployment rate dipped from 5 percent in November to 4.9 percent in December, as some people left the labor market for any number of reasons.

...seems to miss the point that people left the ranks of the unemployed not because they left the labor market but because there has been sustained jobs creation for three years now. But they're stuck on the idea that the unemployment numbers only go down because "discouraged workers" just finally throw in the towel. And do what, exactly? Move out to the street and die?

Certainly there must be some of that, but how about maybe the unemployment rate went down largely because more people are working?

"Discouraged workers" is the pessimistic economic mantra the media has decided on for the Bush Administration. I expected them to simply trot out "the Decade of Greed" again, but I guess they know that doesn't work (it conveys that people are making money, even if greedily, and the media doesn't want to admit that), so "The Era of Discouraged Workers" it is.

In fairness, this AP article is not especially pessimistic. The headline is "Job Growth Slows In Dec. After Nov. Spurt," which is true enough, and admits that "November spurt thing." And:

We have a sturdy job market," said Mark Zandi, chief economist at Moody's Economy.com. He expects another 2 million jobs to be created this year and that average unemployment rate for all of 2006 will move lower.

...

Economists said that the slower growth in payrolls in December was likely to be temporary and didn't suggest a serious backslide in the labor market.

...

Analysts pointed out that month-to-month job figures can be erratic but that the picture painted over the past year is a good one.

Look, if one month has a very high job creation number, generally the next month is going to be lower-- apparently those adding jobs chose November to do so. The average over the last two months 206,500, which is a strong number.

Thanks to Brian.



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posted by Ace at 01:17 PM

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