The Marketplace Report: Two Million Jobs in 2005
ALEX CHADWICK, host:
Back now with DAY TO DAY. I'm Alex Chadwick.
Employers added far fewer jobs than generally expected last month. The Labor Department figures 108,000 Americans were added to the work force in December. That's about half of what leading analysts had expected. On the other hand, the government says the employment picture in November was better than previously expected. Bob Moon is here from the "Marketplace" news bureau in New York.
Bob, once again, I cannot understand the figures in economics. Is it good news or bad news?
BOB MOON reporting:
Well, I guess it's fairly choppy news at this point, Alex. Employment growth wasn't as good as anticipated last month, but it turns out that there was a big spurt in hiring the month before. So it really depends on how you see these numbers. And even these latest numbers for December, those could be revised. The consensus among leading economists surveyed ahead of time was that about 200,000 jobs would be added last month. So 108,000 falls short of that. The good news is that revised figure for November, though. There were 305,000 new jobs in November and not just the 215,000, as the Labor Department reported a month ago. That's the strongest hiring reported since April of 2004.
And now that we've finished the year we can tally up the totals. The economy added two million jobs for all of 2005. That's about the same as it did in 2004. Economists classify that as pretty solid employment growth. And the unemployment rate averaged 5.1 percent last year. That's an improvement from 5.5 percent reported in 2004.
CHADWICK: And I think I saw the figure for last month, 4.9 percent. That's a very good figure.
MOON: Well, it is, indeed, and that's one of the things that the administration is touting today, that even though the figures might not have matched many economists' expectations, there's still good news.
CHADWICK: So how's Wall Street feeling about it?
MOON: Well, in a perverse sort of way, investors seem to be happy that we aren't seeing a really big jump in hiring. You'll recall that earlier this week we talked about how the Federal Reserve was signaling that it might be nearing the end of its steady string of rate increases--of interest rate increases. Well, the slowing rate of job growth is being seen as another reason to think that this is, indeed, going to be the case that the Fed doesn't have to keep raising interest rates.
On the other hand, Wall Street does tend to have a knee-jerk reaction to the headline and only later read deeper into the story. And we might point out that there was also word today of a 3/10ths of a percent jump in hourly wages. That tops the consensus of most economists surveyed, and that could actually renew worries about inflation if that turns into a trend, and that could make the Fed think twice.
CHADWICK: All right, Bob, thank you. I'm--I recall that old dictum from someone, `Bring me an economist with just one hand, please.' Bob Moon of "Marketplace" from American Public Media.
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