The Labor Department just released the unemployment report for December which suggests that little progress was made regarding job creation over the last month. The unemployment rate for December and November was 7.8%. After making progress over the last several months, declines in unemployment have come to a halt. Here are the major points and implications of the jobs report.
Summary of Main Points
- The economy is on a treadmill when it comes to job creation, unemployment was 7.8% in December and November
- 155,000 new jobs were created; this is okay but not enough to reduce the unemployment rate further
- A bright spot was the creation of 55,000 manufacturing and construction jobs
- Black unemployment increased significantly from 13.2% to 14.0%
- White unemployment increased slightly from 6.8% to 6.9%
- Politics is interfering with economic growth
Businesses investment has stalled, despite the fact that corporations have the resources to spend
Consumer confidence is declining rapidly and they are now saving more and spending less as a result
2. The degree of panic over hitting the fiscal cliff was unwarranted and has complicated the path forward significantly
Details of Jobs Report
The incremental employment gains over the last several months have come to a halt. While the economy is not declining, it is also not growing fast enough to create jobs for both new entrants into the labor market and the millions of unemployed workers displaced by the last recession.
The December unemployment rate of 7.8% was identical to the unemployment rate in November (which was revised upward from 7.7% to 7.8%).
The total number of new jobs created (155,000) reflected a net of 168,000 new private sector jobs and a cut back of 13,000 government sector jobs.
The brightest spot in the jobs report was that one third of the new jobs created were in manufacturing and construction – – sectors that have lagged significantly in job creation over the year. Most jobs were created in the following sectors:
- Health Care: 55,000
- Leisure and Hospitality: 31,000
- Construction: 30,000
- Manufacturing: 25,000
Across demographic groups, unemployment increased the most among blacks (13.2% in November and 14.0% in December). Unemployment among whites increased slightly from 6.8% to 6.9% and unemployment among Latinos declined from 9.9% to 9.6%.
Last modified: June 20, 2017