U.S. adds 155k jobs, unemployment rate holds

Posted: January 05, 2013

The U.S. economy added 155,000 jobs in December, at about the same pace as in November, but showed stability, even during eleventh-hour negotiations in Congress over tax increases and spending cuts.

Nonfarm payrolls rose by 155,000 last month, and the unemployment rate was unchanged at 7.8 percent, the Labor Department reported Friday. Over the last 12 months, the unemployment rate has decreased by 0.7 percentage point.

"This morning's jobs report was status quo," said economist Heidi Shierholz, with the Economic Policy Institute, an independent, nonprofit think-tank that researches economic trends and policies on working people. "The labor market added 155,000 jobs, right in line with the 153,000 average of the first 11 months of the year," she said.

"The problem, of course, is that a status quo report in today's labor market represents an ongoing jobs crisis," said Shierholz. "The jobs deficit -- the number of jobs lost since the recession officially began five years ago, plus the number of jobs we should have added just to keep up with the normal growth in the potential labor force -- remains nearly nine million. At December's growth rate the labor market will not fill in that gap until the end of 2021."

The number of unemployed, 12.2 million, was little changed, and the 7.8 percent unemployment rate has been at, or near, that level since September, the government said. The rate for November was revised up from an initially reported 7.7 percent.

The government said hiring was stronger in the previous month than first thought. November's job gains were revised up 15,000 to 161,000, while October was nearly unchanged at 137,000.

"It's hard to get too excited about a jobs report that comes in exactly on expectations, and almost right on the average pace of job growth over the last two years," said James Marple, senior economist at TD Bank Group. "Nonetheless, given the challenges facing the economy -- heightened fiscal uncertainty and struggling global growth -- a gain of 155,000 jobs should be viewed positively."

The seeds of faster growth are being planted - the housing market is in recovery, and credit growth is rising, he said. But with taxes rising by an average of $700 per household, and ongoing uncertainty with respect to fiscal policy, job growth in 2013 "is likely to be beld to the pace set in 2012."

"We cannot lose sight of the fact that 8.8 million jobs were lost during the recession," said Marple. "At an annual pace of 1.8 million, the economy will still be slightly over 2 million jobs short of its peak in Janaury 2008."

Private sector hiring expanded by 168,000 jobs in December. Healthcare added 55,000 jobs, and restaurants and bars gained 38,000 last month.

Construction added 30,000 jobs, including residential and non-residential construction jobs. Manufacturing rose by 25,000.

The retail trade lost 11,300 jobs, after a gain of 161,3000 over the previous four months.

Government lost 13,000 jobs in December, mostly in local government education, the report said. The local government education sector has now lost 294,400 jobs since its recent peak in November 2009.

Employment in other industries, including mining and logging, transportation and warehousing, financial activities, professional and businesses services, and government, showed little change.

"On balance, December's jobs numbers represent yet another good-not-great labor market report, a description of which could characterize just about every piece of incoming employment data issued since midsummer," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC. "As the page turns to 2013, there's little hint of change for the next 12 months. Long live the zero interest rate policy!"

Contact staff writer Linda Loyd at 215-854-2831 or lloyd@phillynews.com.

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