Employers in the United States added 200,000 jobs last month, the Labor Department said on Friday, a report that came on the heels of a flurry of heartening economic news and signaled gathering momentum in the recovery.
Consumer confidence lifted, factories stepped up production and small businesses showed signs of life. The nation's unemployment rate fell to 8.5 percent, its lowest level in nearly three years.
It was the sixth consecutive month that the economy showed a net gain of more than 100,000 jobs - not enough to restore employment to prerecession levels but enough, perhaps, to cheer President Barack Obama as he enters the election year.
No sitting president has won re-election with an employment rate at 8.5 percent, but Obama is calculating that he can make a credible argument that he took over a country in an economic disaster and slowly walked it back.
Still, his response to the jobs report was more tempered than triumphant. "We have made real progress," Obama said during a visit to the new Consumer Financial Protection Bureau. "Now is not the time to stop."
He called on Congress to extend a payroll tax cut that is set to expire at the end of February.
Obama apparently does not want to repeat the mistake of overenthusiasm.
In early 2010 and again in early 2011, the White House was quick to trumpet the news when the economy made moves toward recovery that turned out to be feints, going so far as to refer to the summer of 2010 as "recovery summer."
There are reasons for caution. Many economists do not expect growth in 2012 to keep up the pace of the fourth quarter of last year. Expectations are generally positive, but very modest.
And the president remains vulnerable to attack on his economic record. "This president doesn't understand how the economy works," Mitt Romney, the winner of this week's Republican caucus in Iowa, said at a campaign stop in South Carolina shortly after the jobs report was released.
But economists like Markus Schomer of PineBridge Investments now have a much rosier view than they had back in August, after a spring and summer of lost economic ground and a demoralizing political debate over the nation's debt ceiling.
At that time, Schomer thought, as many did, that government dysfunction was paralyzing the economy. Now, he is ratcheting up his growth forecast for 2012.
"The improving trend in the U.S. labor markets is not just a temporary blip, but seems to be something quite sustainable," he said.
Which is not to say that there are no potential headwinds - last year's signs of momentum were dashed by global factors like gas prices and the earthquake in Japan. "I'm a little bit concerned that Iran could be this year's Japan," Schomer said.
Among the pieces of good news in Friday's report is that the drop in the jobless rate came largely from real gains, not from discouraged workers giving up the job hunt.
The new jobs were spread broadly across industries, with transportation and warehousing, retail, manufacturing and restaurants all adding jobs.
In addition, average wages on private payrolls ticked up by 4 cents an hour, though over the year wages have not kept pace with inflation.
And government downsizing, which has been a drag on the jobs numbers, slowed in December, with only 12,000 public jobs lost. The private sector added 212,000 jobs.
In another positive sign, the unemployment rate seemed to be dropping at a faster rate than the number of new jobs would imply, most likely because new businesses and the newly self-employed are less likely to be captured by the Labor Department's survey of businesses, from which the job numbers are drawn, than by its survey of households, from which the unemployment rate is calculated.
The December rate of 8.5 percent was down from a revised 8.7 percent in November.
indiatimes.com
Consumer confidence lifted, factories stepped up production and small businesses showed signs of life. The nation's unemployment rate fell to 8.5 percent, its lowest level in nearly three years.
It was the sixth consecutive month that the economy showed a net gain of more than 100,000 jobs - not enough to restore employment to prerecession levels but enough, perhaps, to cheer President Barack Obama as he enters the election year.
No sitting president has won re-election with an employment rate at 8.5 percent, but Obama is calculating that he can make a credible argument that he took over a country in an economic disaster and slowly walked it back.
Still, his response to the jobs report was more tempered than triumphant. "We have made real progress," Obama said during a visit to the new Consumer Financial Protection Bureau. "Now is not the time to stop."
He called on Congress to extend a payroll tax cut that is set to expire at the end of February.
Obama apparently does not want to repeat the mistake of overenthusiasm.
In early 2010 and again in early 2011, the White House was quick to trumpet the news when the economy made moves toward recovery that turned out to be feints, going so far as to refer to the summer of 2010 as "recovery summer."
There are reasons for caution. Many economists do not expect growth in 2012 to keep up the pace of the fourth quarter of last year. Expectations are generally positive, but very modest.
And the president remains vulnerable to attack on his economic record. "This president doesn't understand how the economy works," Mitt Romney, the winner of this week's Republican caucus in Iowa, said at a campaign stop in South Carolina shortly after the jobs report was released.
But economists like Markus Schomer of PineBridge Investments now have a much rosier view than they had back in August, after a spring and summer of lost economic ground and a demoralizing political debate over the nation's debt ceiling.
At that time, Schomer thought, as many did, that government dysfunction was paralyzing the economy. Now, he is ratcheting up his growth forecast for 2012.
"The improving trend in the U.S. labor markets is not just a temporary blip, but seems to be something quite sustainable," he said.
Which is not to say that there are no potential headwinds - last year's signs of momentum were dashed by global factors like gas prices and the earthquake in Japan. "I'm a little bit concerned that Iran could be this year's Japan," Schomer said.
Among the pieces of good news in Friday's report is that the drop in the jobless rate came largely from real gains, not from discouraged workers giving up the job hunt.
The new jobs were spread broadly across industries, with transportation and warehousing, retail, manufacturing and restaurants all adding jobs.
In addition, average wages on private payrolls ticked up by 4 cents an hour, though over the year wages have not kept pace with inflation.
And government downsizing, which has been a drag on the jobs numbers, slowed in December, with only 12,000 public jobs lost. The private sector added 212,000 jobs.
In another positive sign, the unemployment rate seemed to be dropping at a faster rate than the number of new jobs would imply, most likely because new businesses and the newly self-employed are less likely to be captured by the Labor Department's survey of businesses, from which the job numbers are drawn, than by its survey of households, from which the unemployment rate is calculated.
The December rate of 8.5 percent was down from a revised 8.7 percent in November.
indiatimes.com
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