December employment

The December employment numbers released by BLS this morning showed a glimmer of hope. The unemployment rate dropped to 9.4% from 9.8% in November with the gain in employment of 103,000. The gain was concentrated in leisure & hospitality and health care sectors. The number of jobs created was somewhat below expectations — the Dow Jones Newswires survey had predicted 150,000 new jobs. But the drop in the unemployment rate was greater than expected. That may be due in part to a slight decline in the size of the labor force.
In addition, the net number of new jobs created in October and November were revised upwards significantly. The new data shows that October’s gain was 210,000 jobs compared to the 172,000 originally reported) and November’s gain was 71,000 jobs (compared to the 39,000 originally reported).
The number of involuntary underemployed (both the number of workers part-time due slack work and number of workers who could only find part time work) declined ever so slightly. The number of voluntary underemployed also declined by a very small amount. However, as the chart below shows, involuntary underemployed and slack work remain at high level.
All in all, good news. But much more needs to be done before we return to a healthy employment situation (and stop wasting human capital).

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