Jobs Report Shows People Leaving Work Force

The December jobs report out this morning presents a confusing picture: Job creation was weaker than expected, but the unemployment rate fell sharply to 9.4 percent.

MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

MELISSA BLOCK, host:

And I'm Melissa Block.

At first glance, the latest jobs report released this morning seems encouraging. The unemployment rate fell from 9.8 to 9.4 percent. That's the biggest month-to-month decline in a decade. But a closer look reveals that drop was due mostly to people leaving the workforce, and that's not a good sign.

NORRIS: What's more, the number of new jobs created was well below expectations. In a moment, we'll visit a midsized manufacturing company that is hiring. It's calling back workers it laid off during the recession.

But first, we have more on the jobs numbers from NPR's Jim Zarroli.

JIM ZARROLI: The Labor Department said 103,000 jobs were added to U.S. payrolls in December, and there were nearly 70,000 more jobs than first thought during the preceding two months. The numbers fell short of the kind of blowout that some economists had predicted. Diane Swonk is chief economist at Mesirow Financial.

Ms. DIANE SWONK (Chief Economist, Mesirow Financial): We did generate more jobs. The trend is in the right direction. But, you know, let's face it, even 170,000 net would be considered anemic for any other recovery, except this one.

ZARROLI: The report did show a big and somewhat perplexing decline in the unemployment rate. Swonk says the drop is due at least in part to the number of discouraged workers who stopped looking for jobs and are no longer counted as unemployed by the government.

Ms. SWONK: Somehow, almost half a million men in particular disappeared off the planet apparently in the month of December because they're no longer in the labor force.

ZARROLI: Despite that, today's report depicts a job market that is slowly showing improvement, and a lot of people who'll get laid off this year will have an easier time finding work than they would have last year.

Ms. JULIA FLORENCEKEYA(ph): I'm open to any industry. I mean, my skills are very...

Unidentified Woman: Transferable.

Ms. FLORENCEKENYA: Exactly.

ZARROLI: At a jobs center run by the New York Labor Department this morning, Julia Florencekeya was talking to a jobs counselor. She lost her job as an events planner for a public relations firm three weeks ago, but she doesn't expect to be out of work very long.

Ms. FLORENCEKEYA: I'm very optimistic. I think it's going to take time, but I don't think it's going to be a year. I hear everywhere that it's picking up, so hopefully that's the case.

ZARROLI: But economists say the rate of job creation right now is simply not strong enough to keep up with population growth or to absorb the millions of unemployed people still looking for work.

Across the room sat Victor Gonzalez, who was laid off from his technician's job at IBM two years ago. I told Gonzalez the unemployment rate had fallen sharply last month, and he gave me a look that can best be described as deeply skeptical.

Mr. VICTOR GONZALEZ: All I see is they're cutting back and cutting back more, and that's the problem. You've got a lot of guys want to work and nobody wants to give the opportunity.

ZARROLI: Obama administration officials acknowledged today that the job market hasn't yet turned a corner.

Austan Goolsbee chairs the White House Council of Economic Advisers.

Mr. AUSTAN GOOLSBEE (Chairman, Council of Economic Advisers): We started from a very deep hole, worse than most any of our lifetimes, so we got a long way to go. The president is the first to say that, but I think we've clearly made steady progress. We're headed in the right direction.

ZARROLI: But for a lot of job hunters, the progress isn't taking place anywhere near as fast as they'd hope.

Jim Zarroli, NPR News, New York.

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