December's Jobless Rate Holds Steady

The Labor Department reports that employers shed 85,000 jobs last month even as the unemployment rate held steady at 10 percent. The figures indicate more people have given up looking for work. Once people stop looking for jobs, they are no longer counted among the unemployed.

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STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. I'm Steve Inskeep.

MADELEINE BRAND, host:

And I'm Madeleine Brand.

There's disappointing news from the Labor Department today. The nation lost 85,000 jobs in December. Few economists expected such a big loss. Still, the unemployment rate remains at 10 percent.

NPR labor correspondent Frank Langfitt joins me now in the studio to sort out the latest numbers. And Frank, this is pretty disappointing overall.

FRANK LANGFITT: It is, Madeleine. You know, economists thought we might lose 10 to 20,000 jobs in December. And some even thought we'd just be flat, we wouldn't lose any at all. But obviously this is worse.

I think the big message from reading the report is that the recovery in this labor market is going to be a long hard slog. I talked to some economists this morning and what they said is employers are facing a lot of uncertainty right now. Consumer demand isn't clear. They don't know if there's going to be enough market for products to justify hiring new people. You got health care legislation, so they don't know what's going to cost to hire a new person. For manufacturers you've got the economics of cap and trade legislation; that's not clear either.

All this uncertainty adds up for most businesses just standing pat on hiring. Then on the negative side, you know, manufacturing, they've been suffering for a long time, they're still doing some layoffs. Housing market is stabilizing, but construction firms still laying off too.

BRAND: Any good news at all in this report?

LANGFITT: Yeah. There's a little bit. November, we actually gained jobs. They do revisions at the Department of Labor, so we actually got 4,000. So that's kind of the good news. But the problem is the American job market's enormous. A hundred and thirty-eight million people are employed in this country. So an increase of 4,000, hardly anyone's really going to feel that.

Another piece of good news, though - temp hiring is up for the fourth month in a row. And that means that companies, you know, often they hire temps first before bringing on full-time staff. So we're slowly getting there.

BRAND: Hmm. Well, what about - we've been talking about the psychological impact of these reports, and so what about that? What will this report have?

LANGFITT: You know, when you look at the numbers, obviously these - it's just data. But if you look at some of the data, you can really see it, and it's pretty brutal. People are out of work longer and longer. I'll give you an example. Six million people, more than six million, are now out of work for more than 27 weeks. That's a huge figure.

The other thing is we talked a little bit about the unemployment rate. The reason it's still at 10 percent and didn't go up is because hundreds of thousands of people just quit looking for work in December. And they look around, they don't see anybody hiring, and they just give up. And once those people stop looking, the government no longer really counts them in the unemployment rate. So the real unemployment rate is almost certainly higher than 10 percent.

BRAND: Now, a lot of those unemployed people are probably wondering when jobs are finally going to start picking up. I mean, we talk about it a lot and you've been talking...

LANGFITT: We do.

BRAND: ...to economists this morning. And what are they saying for the long term?

LANGFITT: Well, they were more hopeful last month, and now they are pushing their estimates back into the year. A couple of guys I talked to today said spring. Sometime in spring they hope that we would see sustained gains in the labor market. The problem is - and I hate to always say the problem is - but even then the numbers probably won't be enough to bring this unemployment rate down.

They say that we'll need at least 100,000 a month or more to begin to provide enough jobs for so many unemployed people out there. And part of the reason is the population keeps growing. You got more college graduates. You have more people out there so there's more competition. And also, another thing is that people expect that as jobs do begin to pick up, more of the unemployed, the people who quit looking, at going to come back into the market looking as well.

So right now the Fed is saying that things will still be at nine percent, in the mid-nine percent at the end of the year and could stay higher in the middle of the year.

BRAND: NPR's Frank Langfitt with the news that the nation lost 85,000 jobs in December. Frank, thank you.

LANGFITT: Happy to do it.

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