The national unemployment rate was unchanged in December at November's seasonally adjusted rate of 10.0%, says the Bureau of Labor Statistics. The rate also matched consensus expectations. Though the rate was unchanged, the U.S. economy lost 85,000 jobs in December, well above November's surprising (revised) gain of 4,000 jobs. 85,000 is also worse than the 35,000 that economists predicted. That might not be as bad as it seems, however, as the number of unemployed Americans still managed to decline in December to 15.3 million from 15.4 million in November. This makes for some more ambiguous jobs news, so let's interpret.
First, here's how BLS shows the unemployment rate's progression over the past few years:
And here's its chart of actual job losses:
This graphic tells me two things. First, November's wonderful news may, indeed, have been just a blip. However, you could still draw a pretty nice trend from December 2008 through December 2009. If this progression continues, then 2010 should show some actual job growth before too long.
On an industry basis, most of the usual suspects continued to suffer in December. Construction lost 53,000 jobs. Manufacturing lost 27,000. There were, however, 47,000 more temp jobs. That could be sort of good news, as it may indicate that businesses do need more employees, but remain reluctant to hire as many full time workers due to economic uncertainty. Health care continued to be a winner, adding 22,000 workers
If you disregard seasonality, the unemployment rate actually increased in December to 9.7% from 9.4% in November. So, yes, seasonality did play a role in the nationally reported rate remaining unchanged. As I noted last month, however, the seasonally adjusted and non-seasonally adjusted rates appear to be coming together:
The duration of those unemployed also continues to be troubling. Those unemployed for more than 27 weeks increased again, though the numbers declined for the prior two time periods:
The number of discouraged workers is also worsening. I find this possibly the worst news in the report. With 929,000 discouraged workers in December, we're beginning to near the one million mark. It's by far the highest number we've seen during the recession:
And the broader marginally attached unemployed number is up to a whopping 2.5 million people. Those Americans aren't reflected in the reported rate of 10.0%, but if they were that rate would jump to 11.4%. If you add in those forced to work part time, then it leaps to 17.3%. That means more than one in six Americans can't find full-time work.
Even though December's national unemployment rate was unchanged, I found this report to be surprisingly negative. I would have thought that December would be a very slow month for layoffs, given the holidays. But the economy still lost 85,000 more workers in December, reversing direction from November's gain of 4,000 jobs. And the soaring number of discouraged workers is also quite bad news. You won't be able to have a legitimate decline in unemployed Americans until that number comes way down. Of course, for that to happen, the national unemployment rate will first have to go up, with those Americans re-entering the workforce. Let's hope they find a newfound optimism in 2010 and more job opportunities.
Lastly, readers did fairly well yesterday in prediction this month's rate. 26% thought the rate would be unchanged at 10.0%. That's a great deal better than last month, when a mere 5% of respondents correctly predicted November's rate. One interesting thing to note is that voters appear to be getting quite cautious about their predictions, as a full 70% of guesses were at or +/- 0.1% from the November rate of 10.0%. Here are those results:
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