Why December Jobs Report Is Such a Bust
Jobless Economic Recovery
(c) Don Wright
For economists and job seekers expecting to end the year with a little good news, the last month of 2009 turned out to be a major disappointment. Even after adding 4,000 jobs in November, according to revised
Who's still slashing jobs? The industries hardest hit by this recession continued to lose jobs in December, although by a much smaller margin than a year ago. Employment in the construction industry fell by 53,000 jobs--continuing the trend that has led to 1.6 million job losses in the sector since the start of the recession. The manufacturing industry has shed 2.1 million jobs since the beginning of the recession, including 27,000 jobs cut last month. Three out of four manufacturing jobs lost since
Who's hiring? The refrain continues: Healthcare employment jumped by 22,000. While the rest of the economy has, by and large, seen jobs chipped away in supersize chunks, the healthcare industry has added 631,000 jobs since
Perhaps the most promising trend for the nation's 15.3 million unemployed is the continued job growth in temporary help services. Employers often begin to test the hiring waters with temporary employees before they add permanent workers to their payrolls. The number of part-time employees who prefer full-time jobs but can't find them, or who saw their hours cut, has not yet begun to decline and has at least held steady since May. The average workweek also stayed even at 33.2 hours.
Why isn't the unemployment rate increasing? Unfortunately, it will. When job market conditions are lousy for a sustained period, workers drop out of the workforce: They stop looking for jobs because they doubt they'll find them. The number of discouraged workers--people who have lost hope and quit their job search--reached 929,000, an increase of 642,000 over a year ago. (About 1.6 million who have also given up their job search did so because of other obligations or complications, such as school.) However, when the job market begins to turn around--employers start to add jobs, and the headlines get more positive--you'll see job seekers head back into the market, and that will increase the unemployment rate, which measures only the unemployed who are looking for work.
What's it going to take for employers to start hiring? Things may be better than they look. December's lousy weather very likely prompted seasonal layoffs in outdoor employment sectors such as construction and may have negatively affected the payroll data, according to
Still, economists say employers must add 125,000 jobs a month to hold employment even--and many more than that to bring the unemployment rate down. Employers may soon begin adding jobs simply because demand has picked up, but many experts warn that small and medium-sized business owners are wary of bringing in staff when they're uncertain of the effects of healthcare reform and cap-and-trade legislation. Some organizations that are interested in hiring again may also be waiting for legislation that would provide a tax credit for new hires. A
Why December Jobs Report Is Such a Bust | Liz Wolgemuth
(c) 2009 U.S. News & World Report