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Economy adds jobs

POSTED: January 07, 2011, 12:00 am

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As the 112th Congress gets to work, and Republicans assume the majority in the House of Representatives, the economy is set to be Topic A on Capitol Hill. Before the recess President Obama made clear that the nation’s economic recovery would be his top priority, and voters seem to indicate that putting Americans to work should be the focus of lawmakers inside the Beltway. Even at the state level, as was evidenced by New York Governor Andrew Cuomo’s State of the State address, job generation is now front and center for politicians. The release today of the December employment statistics sets the stage for a contentious debate between the White House and House Republicans over the proper course to lift the economy.

The Bureau of Labor Statistics (BLS) reports the economy added 103,000 jobs in December and the unemployment rate fell by 0.4 percentage points to 9.4 percent. Even with this relatively good news, there remains a significant disparity between the status of non-Hispanic whites and Blacks in the labor market. Last month, white unemployment was 8.5 percent compared to Black unemployment at 15.8 percent. White women are faring the “best,” with their unemployment rate last month at 7.3 percent. In contrast, the unemployment rate for Black women was 13.2 percent. Among adults, Black men continue to be the hardest hit by the recession. In December, Black male unemployment was 16.5 percent while it was 8.5 percent for white men. Young people continue to face challenges in the job market. Last month the unemployment rate for white teenagers, 16 to 19 years old, was 22.5 percent and for Black youth it was 44.2 percent. Despite public perceptions about the nature of jobs teenagers hold, for many Black and Latino youth work is a necessity to help support the household. Economic conditions in communities of color exacerbate school dropout rates because many youth, out of economic necessity, leave school to earn wages to help support their families.

While the addition of 103,000 jobs last month is good news, it is not sufficient as evidence that the economy recovered. The White House will likely take a cautious tone in reaction to the BLS report because the volatility of the economy has shown that a one-month positive trend is not a sign of stability. Additionally, it is likely that seasonal employment triggered by the Christmas shopping season affected December’s numbers. Last month, the health care sector gained 36,000 jobs with increases in ambulatory services (21,000), hospitals (8,000) and nursing and residential care facilities (7,000). There was also a positive trend in temporary help services (16,000) as employers have begun using temporary workers as a precursor to permanent hiring. Retail trade showed little change over the last month; a sign that the holiday shopping season may have been flat for most store based retailers with customers making more transactions online. The manufacturing sector added 10,000 jobs last month but the BLS reports that employment in the sector has been flat since May.

In December the number of unemployed persons decreased by 556,000 to 14.5 million, down from 15.2 million over the year. Among laborers, the number of persons employed part time for economic reasons remained relatively unchanged. The 8.9 million people who fall in this category work part-time because their hours were cut back or because they were unable to find full-time work. There were 2.6 million people “marginally attached” to the labor force last month. These individuals wanted and were available for work, and had looked for a job sometime in the prior 12 months. The BLS did not count them as unemployed because they had not searched for work in the four weeks preceding the monthly employment survey. Among this group of marginally attached, the BLS accounted for 1.3 million “discouraged workers,” persons not currently looking for work because they believe there are no jobs available for them. This group feeds the number of long-term jobless. The number of people who were out of work 27 weeks and longer, a sign of joblessness, increased by 113,000 from November to December. The remaining group of marginally attached persons had not searched for work because of family obligations or school attendance.

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