December's Jobless Rate Expected To Tick Higher
LINDA WERTHEIMER, HOST:
The unemployment rate fell to eight and a half percent in December. The monthly jobs report was released this morning. It showed employers adding 200,000 jobs to payrolls. So, the year closes out with stronger than expected job growth.
NPR business correspondent, Yuki Noguchi, joins me now. And Yuki, could you just walk us through some of the most important numbers?
YUKI NOGUCHI, BYLINE: Well, the most important one is that payroll number, which was much bigger than economists expected to see. And also, the jobless rate fell, right, from a revised 8.7 percent to eight and a half percent. And there were also just other things, sort of, across the board that were good. A lot of industry showed gains. Average hours worked and hourly earnings also increased.
WERTHEIMER: So this is the last report for 2011. So, can you, kind of – is there some big sum up figure for the whole year?
NOGUCHI: Well yes, for all of last year the number of jobs added is 1.6 million.
WERTHEIMER: Now, that sounds like a lot.
NOGUCHI: But it's not, compared to the size of the whole.
WERTHEIMER: Now, one of the features that this job market has been, of course, how long it takes people to get back to work. How long it takes to get jobs. What does the report tell us about the long term unemployed?
NOGUCHI: Well, that was another significant feature – the number of long term unemployed people continues to go down. In December, it declined to just under 5.6 million. Also, the broader measure of underemployment – this is people who are looking for more work – is also declining. There is one thing that you can't really tell from this report, the labor force is still shrinking – meaning the number of people working, or looking for work, is down. And it's not clear if that's the case because people are giving up looking for work – that would not be a good sign for the economy. But, you had a lot of discouraged workers in recent years, and if the job market keeps improving, you'd expect to actually see that labor force expand as more people decide it's OK to start looking for work again.
WERTHEIMER: What do you think a good jobs report in December means, in the context of the economy?
NOGUCHI: It means big things, Linda. I mean a stronger jobs recovery is a stronger economy. When people have jobs, they can buy houses, they can spend money, they can move, they can sell their homes. It just makes more money flow. And the hope is that this report will see that kind of virtuous cycle. So, for example, in housing, a better employment picture means fewer foreclosures. It means people might even sell their home or move for a job, or even be willing to take the plunge and build a new house. Which, in turn, of course, generates jobs in the housing industry.
WERTHEIMER: Now, I don't want to say too many discouraging words, here, but at the beginning of the year, last year, there were similar signs of hope in the job market. Is anything different this time around?
NOGUCHI: Well, you know, to be sure, no one is predicting that the economy is going to just skyrocket from very slow growth to very high growth. Last year, this time, people were optimistic, as you say, but there were things like the Japanese earthquake and debt crisis, and other shocks that held the economy back. So it's difficult to know, of course, what's looking out there this year. But this time, we're another year further along in terms of working through the housing crisis and reducing high levels of consumer debt. And so, in that sense, economists say that we're that much closer to working our way back to a healthier economic place.
WERTHEIMER: Now, this is obviously going to be very good news for the White House. President Obama is going to be able to say there is a trend here.
NOGUCHI: Well, the White House is going to be able to say that things are going in the right direction, but they also have to be very careful, you know, about being too confident, 'cause things can change, obviously, and there are still 13 million people out of work.
WERTHEIMER: Thank you very much.
NOGUCHI: Thank you.
WERTHEIMER: NPR's Yuki Noguchi.
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