The Job Economy Is Stuck in Neutral

Unemployment dropped from 9.8 to 9.4 percent in December, its lowest rate in 18 months. But a closer look at the numbers reveals this report to be average at best and disappointing at worst. Even with economic indicators turning up across the board, from consumer demand to business sentiment, private sector job creation last month came in below expectations, at 113,000. That's no higher than July or September 2010, and it ranks as decidedly average in a year where the private sector netted 94,000 jobs a month.

We're still "turning a corner." But the corner is starting to feel like the edge of a very large circle.

Dan Indiviglio does a great job summing up the top line stats and graphs from this morning's report. I'd like to break down the jobs recovery by sector. Of the 113,000 jobs added in December, 75 percent came from two industries: Leisure & Hospitality and Health Care. The rest came mostly from manufacturing, retail, and temporary workers.

unemp 2010-12 sectors.png

There's nothing wrong with leisure, hospitality, or health care. Nothing at all! But these are the same industries that grew through the downturn (like health care workers) or in the early stages of the recovery (like cheap food prep workers). If you're looking for a real turnaround, you want to see major U.S. industries actually turn around. That's not happening, yet. Construction is still in a free fall. The information sector is flat. The financial industry continues to limp, while business services have been inconsistent.

jobs 2008 to 2010-11 cht1.png


The U.S. economy blew out its financial-real estate motor in 2007, and it needs a backup engine. Where is that engine going to come from? I don't know. But economists are waiting for something besides health care and leisure to lead the 2011 recovery, and this employment report doesn't get us much closer.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In