US generated 200,000 jobs in Dec, jobless rate eases to 8.5%

06 January 2012 14:27  [Source: ICIS news]

WASHINGTON (ICIS)--The US economy generated some 200,000 jobs in December, the Department of Labor said on Friday, an employment expansion that exceeded most expectations and helped edge the nation’s unemployment rate down to 8.5%.

The US jobless rate had eased to 8.6% in November from October's 9% reading when approximately 120,000 workers were hired. 

Forecasters had been expecting only a marginally better performance in December with perhaps 150,000 new hires.

The US economy should create about 150,000 new jobs each month just to keep up with population growth. 

Economists say that to make any substantial progress in reducing the longstanding high unemployment rate, the economy needs to produce new jobs at or near 300,000 each month for an extended period.

But December’s job growth performance is the best in nearly three years, and the department noted that the number of Americans who want jobs but cannot find them has declined to 13.1m.

Since August 2011, the unemployment rate has declined by 0.6 percentage points, the department said.

That is not a significant rate of decline, but it is a marked improvement from June 2011 when the jobless rate was still above 9%.

The department said that most of December’s job gains were in transportation and warehousing, retail trade, manufacturing, health care and mining.

With retail trade a major component of December’s employment increase, economists will be watching the department’s jobs report for January 2012 for any indication that the December boost was fuelled in part by temporary workers hired for the year-end holiday shopping season.

If most of those temporary jobs ended with the holidays, January’s employment figures might show another decline when they are issued on 3 February.

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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