U.S. unemployment falls to 9.4% in December

By Tribune newspapers
Posted Jan. 7 at 8:15 a.m.

Employers across the country added a modest 103,000 jobs to their payrolls in December, the government said Friday, closing out the year with a bit of whimper instead of the bang that some economists were expecting.

The Labor Department report, however, showed that the unemployment rate dropped dramatically last month to 9.4 percent, from 9.8 percent in November. The drop was likely due at least in part to statistical adjustments, as the government’s count of unemployed workers fell by 556,000 to 14.5 million.

Analysts were expecting new jobs in the order of 150,000 after recent unemployment filings and private surveys of hiring and layoffs suggested that the anemic labor market was solidly improving.

The unemployment rate is based on a monthly survey of households and derived by tallying the number of people with jobs and those who say they are unemployed but actively looking for work. At the end of the year, government statisticians make data adjustments using new information.

Analysts generally put much more stock in the government’s separate survey of public and private employers, from which payroll jobs data by industries are produced. And this report showed a mediocre finish to a year in which the economy, though technically in recovery, grew jobs at a disappointingly slow pace.

The Labor Department said October and November job growth was higher than previously estimated. Even then, employers added just 79,000 jobs in November. And with December’s numbers, the monthly job gain for all of 2010 averaged 94,000. Economists say about 125,000 new jobs are needed just to keep pace with the growing workforce population.

In December, the 103,000 job gains were driven by industries that have many part-time and lower-paying jobs: leisure and hospitality, health and education services and the temporary-help industry. Manufacturing added 10,000 jobs over the month, but construction declined by 16,000. These two were the hardest hit during the recession. Other sectors showed little change.

On another disappointing note, the average weekly work hours reported by all private employers remained flat last month at 34.3, indicating little pick-up in work.

The big drop in the jobless rate is likely to prompt economists to revise their unemployment projections for the year. Many had been expecting stronger job growth in 2011 and the rate to fall to near or just under 9 percent by year’s end.

Federal Reserve Chairman Ben S. Bernanke will likely comment on the latest jobs report Friday morning when he testifies before the Senate Budget Committee on the state of the U.S. economy.

– Don Lee, Los Angeles Times, don.lee@latimes.com

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  1. tom0942 Jan. 7 at 8:56 a.m.

    9.4% unemployment counts for “good” news during the BHO administration.

    Hope & Change.

    These numbers probably reflect temporary retail workers for Christmas shopping. Watch the unemployment rate go up again in January.

  2. Ted Jan. 7 at 9:27 a.m.

    Thanks for voting Republican. Businesses are freeing up cash already.

  3. FloridaJim Jan. 7 at 10:09 a.m.

    The unemployment numbers do not consider the remaining 8% who are no longer looking or accepting employment. The third year on Obama’s planned unemployment benefits tie more and more of the people to government handouts, which is Obama’s longterm goal.

  4. ColdWarVet Jan. 7 at 11:28 a.m.

    I don’t think the term “falls” was correct. The writer must be in love with Obama? Drops would have been a better term. Also, when GWB was in an gas prices rose it as his fault. But since O man has been in gas prices have soared and yet the “faid & balanced” liberal media gushes over him. No wonder people watch FNC to get good reporting and not some liberal slanted opinion.

  5. Jeff Jan. 7 at 11:40 a.m.

    “The drop was likely due at least in part to statistical adjustments.”

  6. Nathan Jan. 7 at 12:15 pm

    Unemployment is still high, because many companies have shed hourly workers and simply moved the work onto salaried workers that don’t get paid overtime. Why pay someone to do menial tasks that you can make engineers do for free?

  7. Kelly Hansen Jan. 7 at 12:27 pm

    A 75% increase in state income tax? Is this some kind of joke? That’s outrageous!!! These politicians need to cut spending and reform government pension plans. The payouts are huge. These Democrats and Republicans (if any) backing this plan need to quick stealing from our wallets to line their own and their union friends. They say it’s temporary (4 years) but they will find a way to make it permanent. Plus they already say they are leaving a 25% increase permanent.

    If this passes, I will do:
    1) Make all purchases from out of state to avoid all sales taxes.
    2) Find additional deductions to avoid income tax.
    3) Cut our household spending by at least the amount of the tax increase (of course the big spending politicians don’t realize their tax increase will hurt the Illinois economy even more).
    4) Move out of Illinois if property values ever increase so we can sell.

    I can not believe Illinois citizens voted Quinn for governor. They are getting what they deserve….higher taxes, more government corruptions and a worse economy,

    Solution: Cut current government spending and reform the pension plans. Put government workers on 401k type plans (they get back what they put in, not what they can steal from taxpayers).

    Wake up, Illinois! Vote these bums out in 2012. You had a chance in 2010, but failed. Now we are all screwed.

  8. MinisterR Jan. 7 at 12:32 pm

    @Kelly If only we had people with courage or honor to do the right thing – election be d@@mDed. Public sector unions seem to hold all the power.

  9. Jeeper Jan. 7 at 12:33 pm

    I saw the Christmas help already on the unemployment line. The Leisure and Hospitality employees were also there, but expect these folks to find jobs when Spring Break season comes…and goes…

  10. Alz Jan. 7 at 1:30 pm

    See this from Karl Denninger: http://networkedblogs.com/cHQ9N

    “There is in fact no ‘recovery’ – all we’re doing and all we’ve been doing is putting our economy on the government Credit Card, but these machinations are failing to produce a response in the private economy that will be able to lift tax revenues and ultimately permit reduction in the deficit spending via ‘growth.’”

    “We have spent more than two years now on a failed policy, and despite the alleged ‘ordinary lag’ that these policy moves have, which has been the excuse of Bernanke and other policy makers to explain away why there was no immediate response, the six month to one year lag time they usually cite has now been exceeded by more than twice.”

    “It is imperative that we change course – these policies have in fact failed and we are now tightening the flat spin with continued attempts to do that which has proved to not work.”

  11. Darkwater Jan. 7 at 1:40 pm

    9 Percent unemployment Nope add to that those who do not get unemployment from the get go, then add those that have been dropped from unemployment for one reason or another, add another group who have taken early retirement at 62, then add to that those who have given up looking for a job all together it adds up to about 20 to 25%. Yep, some president we have not!

  12. conservativemaster Jan. 7 at 2:51 pm

    Brought to you by the Recovery Act of America. Proving once again the government cannot create jobs, only unemployment checks and paid government holidays that most of us can’t take off.

  13. sweikert Jan. 7 at 2:53 pm

    tom0942, the unemployment figures are routinely adjusted for seasonal fluctuations so the drop in Christmas temporary help is already built into the figures.

  14. Extremelinks Jan. 7 at 2:58 pm

    Figures lie and lairs figure

  15. fg Jan. 7 at 4:25 pm

    The drop in numbers are more of a reflection on how unemployment is calculated, and the drop is not a true number of the people unemployed. Back during the Reagan era, the quickest way to lower unemployment rate was to REDEFINE Unemployment. Unemployment is now defined by counting only the number of people collecting unemployment benefits. Once your benefits run out, you are redefined as “No Longer Looking for Work”. Its a nice trick which plays out well in the media, but does little to put food on the table.

    Both parties have since used this ploy. You can expect the unemployment rate to drop further and faster as Republicans deny further extensions for unemployment benefits.

  16. barb Jan. 7 at 4:53 pm

    are these people nuts?!? Gas prices increase because in Nov. 3000 people found jobs out of 420,000 unemployed, congrats! but what about the other 420,000??? Its been 2 maybe 3 wks since this last statement was made. Gas prices have increased over 20 cents a gal, what the hell are us unemployed people suppose to do to drive from one company/business to job search? Yea the computer can be a tool but face to face interview? What if I get that $7.50 an hr job and have to travel 15 miles one way to work? AM I the only person in the world that doesnt seem to get what the hell is going on???????? WHY THE HIGH GAS PRICES!!!!!! I want to know!