Job growth in the U.S. came in stronger than expected in the month of December, according to figures released Friday by the Labor Department, with the increase in jobs helping to drive the unemployment rate down to its lowest level in almost three years.
According to the report, the economy added a net 200,000 new jobs for the month, with the addition of 212,000 private sector jobs more than offsetting a loss of government jobs.
Most economists had forecast a more modest pace of job creation, predicting the private sector would add about 160,000 jobs to produce a net increase of 150,000 positions as government continues to shrink.
The unemployment rate subsequently continued to tick downward, falling to 8.5 percent in December, although the November unemployment rate was revised up to 8.7 percent from the 8.6 percent initially reported.
Most economists had expected the unemployment rate to increase to 8.7 percent in December. Labor Department officials noted that the unemployment rate has fallen 0.6 percentage points since August.
With the unexpected decrease, the unemployment rate fell to its lowest level since coming in at 8.3 percent in February of 2009.
However, the number of long-term unemployed, those out of work for 27 weeks or more, remained little changed at 5.6 million and accounted for 42.5 percent of the unemployed.
Peter Boockvar, equity strategist at Miller Tabak, said, "Bottom line, the best job gain since September brings the 2011 monthly average to 137,000, very ordinary in a recovery but hopefully December begins a new higher level of trend."
"As we all know though, much of that will be determined by how Europe plays out in 2012 and what spills over to the rest of the world," he added. "Some think the U.S. can skirt by a European recession but mathematically that will be tough without some impact."
The number of involuntary part-time workers, those whose hours have been cut back or been unable to find full time work, declined by 371,000 to 8.1 million in December.
The number of discouraged workers, those no longer looking for employment because they believe no jobs are available for them, was tallied at 945,000 in December, a decrease of 373,000 from a year prior.
An additional 1.6 million people are tallied as marginally attached to the work force because they have not sought work in the four weeks prior to the survey.
Of the private sector job gains in December, a large chunk, 50,200, were found in the transportation and warehousing sector, while the retail, manufacturing and health care sectors also added significant numbers of new jobs.
For the full year of 2011, the private sector added 1.9 million jobs, while federal, state and local governments shed 280,000 jobs.
Average hourly earnings for all employees rose by 0.2 percent in December to $23.24, while the average hourly workweek also increased to 34.4 hours.
by RTT Staff Writer
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