It’s Friday, Unemployment is at 7.8%
Lately, the jobs numbers have felt like a broken Cure record. The same glum, moody tune is repeated again and again.
According to the Bureau for Labor Statistics, the unemployment rate stayed at 7.8% (November's rate was revised up 0.1%). 155,000 jobs were created in December 2012, down from 161,000 in November. That's in the same mediocre range we’ve seen for months. James Pethokoukis points out that with December’s number, 2012’s average monthly jobs growth was 153,000, “exactly the same as the average monthly gain for 2011.” Plug December’s number into The Hamilton Project’s Jobs Gap calculator and you’ll see that it’ll be past 2025 before we return to pre-recession employment levels.
The Associated Press reports that there was strength in construction, likely because of Superstorm Sandy reconstruction, and manufacturing.
Marty Regalia, the U.S. Chamber’s chief economist commented on the December numbers:
For yet another month the U.S. economy has turned in a mediocre performance in the labor market with no real improvement in sight. Less than 2/3 of the workforce is even participating in the economy and the unemployment rate is stubbornly fixed at close to 8%. The workweek and the wage rate showed some slight improvement but not enough to offset the negatives from the recent tax hikes. The unemployment rate is about the same but yet the number of discouraged workers rose in December to over 1 million.
The administration and Congress must work to address our long-term fiscal problems through tax and entitlement reform, and by getting our debt and deficits under control.
Moody’s Analytics chief economist, Mark Zandi, blames Washington for holding back the economy:
Unfortunately, at this pace of job growth unemployment will continue to only slowly drift lower. And I don't expect an improvement in the job market until after Washington settles on what spending cuts and tax reform will be done, if any, and raises the Treasury debt ceiling. The uncertainty created by the coming political battles will continue to limit any gains. ... However, the economy is raring to go, and if policymakers could simply get things reasonably together, it would be off and running.
The takeaway is the common refrain heard here often: To significantly reduce unemployment, we need more economic growth.
I don’t want to go all Robert Smith on you. On a positive note, the oil and gas sector continued to create jobs. Shale energy continues adding value.