Thoughts on the December Jobs Report
On Friday, the Bureau of Labor Statistics (BLS) released the jobs report, more formally known as “The Employment Situation,” for December 2011. The headline numbers were 200,000 new jobs and a decline in the unemployment rate to 8.5% from 8.6% in November.
Now, the trend for each headline number is clearly in the right directly: more jobs and fewer unemployed. However, when we look more closely at the report, there are a lot of causes for continuing worry about the health of the U.S. labor market.
First, and most importantly, the size of the labor force continued to decline, down 50,000 workers, even though the population of potential workers rose by 143,000. This caused the number of potential workers “not in the labor force” to rise by 194,000, which is almost equal to the 226,000 decline in the number of unemployed workers. In other words, more and more Americans are simply giving up on trying to even find a job. Until we see the size of the labor force rising on a consistent basis, we will know that the labor market is still is trouble.
Second, 42,200 of the new jobs in December were for “Couriers and Messengers,” as online shopping continued to grow, creating temporary demand for these workers to deliver Christmas presents. This same phenomenon was observed during December in both 2009 and 2010, and was followed by an almost equal decline in the number of “courier and messenger” jobs during January. Look for a loss of more than 40,000 “courier and messenger jobs during January 2012, as well.
Third, 27,900 of the new jobs were in “Retail Trade,” with 13,000 in general merchandise stores, 11,100 in clothing stores, and 8,200 in “food and beverage” stores. Were these also temporary Christmas jobs? It certainly seems likely. January’s jobs report will let us know for sure. In any case, these certainly are not the sort of high-paying jobs on which one can raise a family; more likely, these are minimum-wage, or slightly above, jobs.
Fourth, 22,600 new jobs were in “Health Care.” While these could be doctors, nurses and administrators, it is more likely that they are low-paying, and temporary, positions as nurses assistants and home care workers. Still, a bad job is better than no job.
For all of these reasons, we should not consider the U.S. jobs market to really be on the mend and out of the woods, but at least the trend is in our favor.
