With the stock market off to a dismal start this year, largely thanks to economic troubles in China, it got some good news this morning regarding the American economy.
The December jobs report from the Bureau of Labor Statistics, like the November report, showed strong job growth. While economists were predicting job growth about equal to November’s 211,000, the report came in with a net 292,000 new jobs. The unemployment rate, meanwhile, held steady at 5.0 percent for the third month in a row. And the jobs created in October and November were revised upwards by 50,000. The last quarter was the year’s strongest quarter for job creation. Overall 2015 averaged 221,000 net new jobs a month. That’s down from 2014’s 260,000 jobs, but the second best since 1999, at the height of the 90’s boom.
The fact that the economy added almost 300,000 new jobs last month while the unemployment rate held steady, would indicate people who hadn’t been looking for work now were. And the participation rate ticked up a notch, from 62.5 to 62.6 percent. But it is still down from last December’s 62.7 percent and way down from pre-recession levels, when it was above 70 percent.
Long-term unemployment — more than 27 weeks — is down substantially from a year ago, from 2,772,000 to 2,085,000, a drop of nearly 25 percent. And the broader measure of unemployment, which includes people working part-time who would prefer full-time and those too discouraged to look for work, remained the same as November, 9.9 percent. A year ago, however, it was at 11.2 percent.
All in all, this is a good report, justifying the Federal Reserve’s decision last month to finally begin to raise interest rates and encouraging it to continue to do so slowly and steadily in the months ahead.
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