rate falls to 8.5%; GOP still using jobs as battering ram
Sidebar: “How Many Americans are Really Unemployed?”
months to go before the presidential election, the economy has finally
to produce more jobs.
added 200,000 new jobs in December, the best showing since last spring,
Department of Labor reported Friday. The unemployment rate fell
percent to 8.5 percent, its lowest level since February 2009.
jobs numbers immediately touched off a spate of claims from both
parties. The Obama White House said they indicate that the
continuing to “heal” from the worst downturn since the Great
Republicans called the 8.5 percent jobless rate “shockingly high.”
say the better data indicate the US economy is gradually improving,
sign that private businesses are becoming more confident. However,
confidence is tempered as executives watch events in Europe, where a
may already be under way, and keep a wary eye on what is expected
to be a
relatively high level of foreclosures in the US for months to come.
lot stronger job gains for a longer period of time before we can say we
moved out of recovery and into full expansion mode,” says Joel
Naroff of Naroff
Economic Advisors in Holland, Pa.
improvement in the jobs report was broad-based, with gains in
(50,000 new jobs), retail (28,000), manufacturing (23,000),
(23,000), and food and leisure (24,000). Government jobs continued to
be a drag
on the economy, with a loss of 12,000 jobs in December.
numbers, economists say, may reflect recovery from many of the negative
that had kept growth low: the earthquake and tsunami in Japan,
which hurt the
auto sector; the summer uncertainty as Congress debated raising the
debt ceiling; and the continuing saga in Europe over sovereign
we are now back on track,” says John Canally, chief economist at LPL
in Boston. “Fed Chairman Ben Bernanke has said the economy was a little
unlucky; now, maybe we’ll have a run of months without any bad luck.”
in the unemployment rate may also reflect a shift in the number of
looking for work. The total labor force has been
steadily shrinking, observes
Mr. Naroff. “This may indicate there are a lot of frustrated workers
or maybe people coming off the unemployment rolls because they
have run out of
benefits and are taking some time off, or maybe baby boomers starting
retire,” he says. “But I don’t think we need to be alarmed by
jobs improvement, the economy still has a long way to go to make up the
million jobs that were lost in the recession. At the current rate, it
take about seven more years – until about 2019 – to get back to the
prerecession unemployment rate, writes Heidi Shierholz, an
economist at the
Economic Policy Institute, a think tank in Washington.
were quick to interpret the new numbers to buttress their own views on
state of the economy. Democratic House leader Nancy Pelosi of
saying in a statement that the report shows a step in the right
castigated Republicans for
precipitating an unnecessary crisis over the debt
ceiling “that hurt our middle class.”
Pelosi, as well as the White House, called on Congress to approve a
extension of the payroll tax cuts. Late
last year, lawmakers agreed to extend
the tax cuts until the end of February.
Republicans, in the meantime, are now using 8 percent as the benchmark
measure President Obama’s prowess on the economy. The last time
unemployment rate was below 8 percent was in January 2009, the first
Mr. Obama’s presidency. House Speaker John Boehner of Ohio noted
unemployment rate has been above 8 percent for 35 consecutive months.
He blamed the White House and the Democratic-controlled Senate
by failing to enact the full-year extension of the payroll tax credit.
has passed nearly 30 jobs bills that remain stuck in the
Senate,” he said in a statement.
political rhetoric and the economic uncertainties, some companies are
contemplating adding workers in 2012, says Joanie Ruge, New
employment analyst at Randstad Holding, a large staffing company.
some conversations with companies that are talking about making some
hires,” says Ms. Ruge. “We are
talking about Fortune 1000 companies that may
need to hire a lot of people.”
company is also in the temp business, which actually saw a decrease in
in December. That’s was somewhat
worrisome, economists say, because the temp
industry often is a leading indicator of employment trends.
the drop in temp hiring, at least as far as Ruge’s company is
about because companies converted the
temps to full-time employees. “They
wanted to get people employed and on their books before the end of the
she says. “But
we will need to see that negative growth on temp hiring reverse
in the future.”
How many Americans are really unemployed?
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