U.S. Unemployment Rate Held Steady In December
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We got a snapshot of the economy at the end of 2012 today. And if you were hoping for a big change in this morning's jobs report, the picture is probably disappointing. In short, it's more of the same.
CORNISH: There was modest job growth in December, and the overall unemployment rate was unchanged, 7.8 percent. The job market grew despite Hurricane Sandy and the budget impasse in Washington. But as NPR's Jim Zarroli reports, there was nothing to suggest a major rebound in hiring anytime soon.
JIM ZARROLI, BYLINE: The December employment report was remarkable only for how unremarkable it seemed. Economists such as Ken Mayland had expected a moderate increase in hiring, and that's what occurred.
KEN MAYLAND: It is an OK employment report, not a good one or a stellar one. But it's not a bad one either.
ZARROLI: The report indicated that hiring rose in the construction sector, one more sign of a healthier housing market. Manufacturing and health care were also up, but retail hiring was down. Overall, the economy added 155,000 jobs, continuing to lurch forward at a sluggish but steady pace. For 2012 as a whole, the economy added 1.8 million jobs. Ward McCarthy is chief economist at Jefferies and Company.
WARD MCCARTHY: The bottom line here, I think, is that we continue to make progress in the labor market. But it's still going to take us another year and a half to two years before we regain all of the jobs that we lost during the prior recession.
ZARROLI: The report showed a slight increase in average hourly wages, and Ken Mayland says that's pretty significant. He says economic growth was pretty weak during the last three months of the year. Normally, employers would be laying people off. They'd be trying to make do with fewer workers and paying them less. But Mayland says they've already trimmed their workforces to the bone.
MAYLAND: The low-hanging fruit has been picked. And now it's just tougher and tougher to get productivity increases. So if you want output increases, you have to actually add bodies to the workforce.
ZARROLI: The most surprising feature of the report may have been what wasn't there. There was no sign of a major loss of jobs as a result of Hurricane Sandy. In fact, the storm could have been a net plus. All of the rebuilding may have been part of the reason for the rebound in construction jobs. Alan Krueger, chairman of the president's Council of Economic Advisers, says there continues to be a basic resiliency to the U.S. economy.
ALAN KRUEGER: There's been a lot of healing taking place. That's the word I like to use. The job market is on the mend, but it's not at full health.
ZARROLI: Likewise, there was a considerable anxiety over the budget impasse in December. Consumer confidence took a hit, and business investment fell off. But job growth came in at about the same rate it had been coming in all year. Ward McCarthy says that doesn't mean there wasn't an impact.
MCCARTHY: I think that we would have had more robust hiring in the fourth quarter had there not been anxiety about the fiscal situation. But we're still not completely clear of the obstacles that the politicians can throw ahead of us.
ZARROLI: McCarthy points out that there's already a new budget impasse looming. Congress has to agree to raise the debt ceiling in the months to come, and congressional Republicans have signaled they may use the occasion to pressure the White House to make deep spending cuts. That means the uncertainty over fiscal matters is likely to drag on for the next few months. And the longer it does, the more cautious employers will become about how many new workers they want to bring on.
Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.