HR News & Trends

December Jobs Report Surprises With More Hiring, Lower Unemployment

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Confounding predictions of mediocre new hiring and a rise in unemployment, the U.S. Department of Labor said Friday that 148,000 new jobs were added to the national economy, while the unemployment rate decreased to 7.7 percent, a four-year low.

Economists were predicting November’s new jobs would come in under 100,000, and that the unemployment rate would remain at 7.9 percent. A few thought it might rise to 8 percent.

The stronger than expected jobs report pushed stock futures higher.

Hurricane Sandy was widely anticipated to have cut into hiring in the Northeast, especially in New Jersey, New York, and parts of other states which were the hardest hit by the storm. However, the Labor Department’s data collecting and analysis arm, the Bureau of Labor Statistics, said “Sandy did not substantively impact the national employment and unemployment estimates for November.”

Hurricane’s minor effect on jobs

Later this month, the Labor Department will release jobs data by state and region. Those numbers will provide a clearer picture of the storm’s impact. However, this morning’s report offered at least one hint of the effect — construction jobs plummeted by 20,000.

In addition to the storm’s surprisingly minor affect on jobs, another reason the report came in so much higher than expected is that governments across the country stopped bleeding jobs. The post office shed 4,000 positions, while local governments cut 2,000. However state governments added jobs, for a net loss of 1,000 public jobs.

Overall, most private sector job categories grew in November. The service sector added 169,000 positions (manufacturing and construction losses cut into the totals). The largest growth came in the retail sector (52,600), especially in clothing stores which alone added 33,000 jobs. Electronics and appliance added 9,100.

Temp agencies brought on 18,000 workers; the healthcare industry added 20,000, many of them in nursing and residential care facilities. Hospitality also grew strongly, with 14,100 jobs added in arts, entertainment , and recreation; another 9,000 jobs came from restaurants and bars.  IT added 7,100.

Despite jobs report, economy still moving slowly

The Society for Human Resource Management’s LINE report predicts continued strong hiring by the service sector this month. SHRM says 34 percent of service-sector companies will grow payrolls in December, an improvement of 12.2 points over last year and “is the highest net level of hiring for services in December in the past four years.”

Hiring by manufacturers, SHRM predicts, will fall by 3.8 points in the month, as a net of 25.3 percent of employers hire.

Despite the strong November numbers in many areas, looking more broadly, it’s clear the economy is still anemic. The cloud behind the silver in the numbers came in a reduction of initial job counts for September and October.  The adjustments, which occur each month, cut the count by 49,000 jobs. In September, employers added  132,000 jobs, and in October, it was 138,000.

In addition, the decline in the unemployment rate was the result of fewer people looking for work. As many people stopped looking in November as began looking in October, the month when the unemployment rate went up. Overall, said the BLS, “Total employment was about unchanged in November, following a combined increase of 1.3 million over the prior 2 months.”

Likewise, the total number of workers unemployed or working part-time because they can’t find full-time work stands at 22.7 million, a number that has changed little in the last few months.

John Zappe is the editor of The Fordyce Letter. He was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. Never a recruiter, he instead built online employment sites and sold advertising services to recruiters and employers. Besides writing for ERE.net, John consults with digital content operations, focusing on the advertising side. Contact him at zappemedia@gmail.com.