December Jobs Report: What It Means For The Economy
Finally, a bit of bright news about the economy: America's unemployment rate has officially dropped from 7 percent to 6.7 percent, according to the latest jobs report from the Labor Department. This is the lowest the unemployment rate has ever been since the recession struck in Oct. 2008. Time for champagne, right? Well, hang on.
There's a catch. The unemployment rate is lower, sure, but it's in part because Americans have stopped searching for jobs. By the government's definition, "unemployed" means "actively looking for work." So the people the government categorize as "unemployed" don't include the homeless, or people who have become frustrated with the job search and just stopped.
So what else is important in Friday's stats release? Well, in December of 2013, 74,000 jobs were added. That's good, right? Actually... that's the smallest number of jobs the government has added in three years. On average, the U.S. government adds 214,000 jobs per month. So, by comparison, 74,000 jobs is barely over one-third of the average.
But how did individual industries stack up in comparison to the overall statistics? Here's a breakdown of industries with the biggest job cuts and gains in December 2013:
- Healthcare: Cut 10,000 jobs. (This is the first time in the last 10 years that the healthcare industry has cut jobs.)
- Construction: Cut 16,000 jobs
- Government: Cut 13,000 jobs
- Factories: Added 9,000 jobs
- Retailers: Added 55,000 jobs
Some analysts believe that in 2014, the U.S. economy could lose another 200,000 jobs. So right now would be a great moment for the House of Representatives to approve unemployment insurance — in other words, convince House Republicans to get with the program. Again.
Despite the hit-and-miss statistics, we do have one good piece of good news: In the Oct.-Dec. 2013 quarter, the economy expanded at 3-3.5 percent, which way overshot expectations of 2 percent. We'll take it!