What the December U.S. Jobs Report Tells Us About 2013
The December U.S. jobs report released Friday showed the country's unemployment rate failed to improve in the last month of 2012, with the economy adding only 155,000 jobs. The unemployment rate, originally reported as 7.7% for November, was revised upward for that month to 7.8%, and stayed the same for December. The figure was roughly in line with expectations. Estimates for the number of jobs created in December ranged between 140,000 and 160,000. Non-farm payroll hiring in December was most robust in health care, which created 45,000 jobs. Manufacturing, construction and hospitality also logged strong gains. Oddly, employment dipped in retail during the holiday-sales month, which is usually the most active time for the sector. The government also shed jobs, dropping 13,000. After eliminating some 653,000 jobs from 2008 to 2011, state and local governments kept headcount mostly even in 2012. The decline in December could be attributed to the economic uncertainty hanging over Capitol Hill. The Pentagon has warned that workers may have to be furloughed if the debate over raising the U.S. debt ceiling , set to be taken up in a few weeks, is dragged out past next month. Also weighing on government hiring is the pack of problems that will challenge growth, like rising worker pension costs, steep spending cuts and reduced federal funding that will likely kick in during 2013. As Moody's chief economists told USA Today , "The fiscal headwinds will be blowing hard in 2013." To continue reading, please click here...
The December U.S. jobs report released Friday showed the country's unemployment rate failed to improve in the last month of 2012, with the economy adding only 155,000 jobs.

The unemployment rate, originally reported as 7.7% for November, was revised upward for that month to 7.8%, and stayed the same for December.

The figure was roughly in line with expectations. Estimates for the number of jobs created in December ranged between 140,000 and 160,000.

Non-farm payroll hiring in December was most robust in health care, which created 45,000 jobs. Manufacturing, construction and hospitality also logged strong gains.

Oddly, employment dipped in retail during the holiday-sales month, which is usually the most active time for the sector.

The government also shed jobs, dropping 13,000.

After eliminating some 653,000 jobs from 2008 to 2011, state and local governments kept headcount mostly even in 2012. The decline in December could be attributed to the economic uncertainty hanging over Capitol Hill.

The Pentagon has warned that workers may have to be furloughed if the debate over raising the U.S. debt ceiling, set to be taken up in a few weeks, is dragged out past next month.

Also weighing on government hiring is the pack of problems that will challenge growth, like rising worker pension costs, steep spending cuts and reduced federal funding that will likely kick in during 2013.

As Moody's chief economists told USA Today, "The fiscal headwinds will be blowing hard in 2013."

U.S. Jobs Report: Outlook for 2013 It's unclear how much hiring employers will do this year, with major budget talks ahead in Washington.

But with some fiscal drag expected to weigh on the struggling U.S. economy this year, many analysts don't expect much change in the unhealthy unemployment level - and some even see it rising.

Many companies in 2012 played it safe by employing just the minimum number of employees to get the job done - a trend likely to continue into 2013.

That's why the job growth rate is still not increasing fast enough to lower the elevated unemployment. Typically at this stage of an economic recovery, job growth is much higher than it is now.

Also troubling when looking at the job picture is the labor participation rate, which stands at 63.6%. The rate in a healthy economy is 67%-68%.

Approximately 12 million Americans are among those counted as unemployed. When you add in those who have fallen off the radar, stopped looking for work, and returned to school because they can't find work, the number swells to some 24 million.

In addition, millions of Americans are still struggling to secure full-time work. For this group, the only thing better than a full-time job is a part-time one. The number of involuntary part-timers employed in December held steady from the previous month at 7.9 million.

Part-time workers have always been the norm for scores of retailers and restaurants, but the trend has exploded across other sectors thanks in part to technology, which has made workers more efficient, allowing them to complete their work in less time, thus cutting shift hours.

The retail sector is a good example. The most recent data from the Bureau of Labor Statics has found that since 2006, the retail sector has cut a million full-time jobs, while adding more than 500,000 part-time jobs.

And then there is the growing number of employers who are simply trying to find ways to cut costs and skirt having to pay employees full-time healthcare and retirement benefits by employing part-time workers.

Markets were up slightly after the U.S. jobs report release, with the Dow Jones Industrial Average up 0.13%, the Standard & Poor's 500 Index up 0.28%, and the Nasdaq up 0.09% by 12:30 p.m. EST.

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