Economy Watch: Employment Barely Growing Enough to Keep Up
- Jan 07, 2013
The final monthly employment report of 2012, released by the Bureau of Labor Statistics on Friday, pointed to continuing tepid growth in U.S. employment. The economy is creating some jobs, fortunately, but for the entire year of 2012, only about 153,000 per month. Some estimates put the number of new jobs needed just to keep up with the growth of the workforce at 90,000 or so, while other estimates are higher (the working-age population increases at 0.7 percent a year, according to the Congressional Budget Office).
In any case, growth of 153,000 a month counts as tepid, considering that a large fraction of that simply goes to keeping up with natural growth in the labor market. Not only that, the BLS offered up a number of statistics in December that reflect that labor stagnation
For example, in December the number of long-term unemployed—which the bureau counts as those jobless for 27 weeks or more—was essentially unchanged month-over-month at 4.8 million. All together, the long-term unemployed account for a worrisome 39.1 percent of the unemployed. Also, the civilian labor force participation rate held at 63.6 percent in December, and the employment-population ratio, which came in at 58.6 percent, was essentially unchanged over the month.
The non-manufacturing sector continues modest growth
Economic activity in the non-manufacturing sector grew in December for the 36th consecutive month, according to the latest Non-Manufacturing ISM Report On Business released on Friday, which surveys U.S. purchasing and supply executives. The non-manufacturing index registered 56.1 percent in December, 1.4 percentage points higher than in November, thus pointing to continued growth at a slightly faster rate in the sector.
Some aspects of the sector’s growth were slower, however. The organization’s Non-Manufacturing Business Activity Index registered 60.3 percent, which is 0.9 percentage points slower than November, but still reflecting growth for the 41st consecutive month. The Prices Index also was also down, by 0.4 percentage points to 56.6 percent, indicating prices increased at a slightly slower rate in December when compared to November.
Still, the New Orders Index increased by 1.2 percentage points to 59.3 percent. Also, the Employment Index increased by 6 percentage points to 56.3 percent, indicating growth in employment for the fifth consecutive month at a significantly faster rate. All together, 13 non-manufacturing industries reported growth in December, according to the survey, and respondents were mostly positive about the economy.
Wall Street had a modest up day on Friday, with the Dow Jones Industrial Average up 43.85 points, or 0.33 percent. The S&P 500 gained 0.49 percent but the Nasdaq was up a scant 0.04 percent.