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Unemployment rate falls as economy adds 200K jobs

Technician Shawn Cable repairs a video game console at the Laptops Plus computer store in Winter Park, Fla., Thursday, Jan. 5, 2012. A burst of hiring in December pushed the unemployment rate to its lowest level in nearly three years, giving the economy a boost at the end of 2011. (AP Photo/John Raoux)

Technician Shawn Cable repairs a video game console at the Laptops Plus computer store in Winter Park, Fla., Thursday, Jan. 5, 2012. A burst of hiring in December pushed the unemployment rate to its lowest level in nearly three years, giving the economy a boost at the end of 2011. (AP Photo/John Raoux)

WASHINGTON (AP) — A burst of hiring in December pushed the unemployment rate to its lowest level in nearly three years, giving the economy a boost at the end of 2011.

The Labor Department said Friday that employers added a net 200,000 jobs last month and the unemployment rate fell to 8.5 percent, the lowest since February 2009. The rate has dropped for four straight months.

The hiring gains cap a six-month stretch in which the economy generated 100,000 jobs or more in each month. That hasn't happened since April 2006.

The steady drop is a positive sign for President Barack Obama, who is bound to face voters with the highest unemployment rate of any sitting president since World War II. Unemployment was 7.8 percent when Obama took office in January 2009.

Still, the level may matter less to his re-election chances if the rate continues to fall. History suggests that presidents' re-election prospects hinge less on the unemployment rate itself than on the rate's direction during the year or two before Election Day.

For all of 2011, the economy added 1.6 million jobs, better than the 940,000 added in 2010. The unemployment rate averaged 8.9 percent last year, down from 9.6 percent the previous year.

Economists forecast that the job gains will top 2.1 million this year.

The December report painted a picture of a broadly improving job market. Average hourly pay rose, providing consumers with more income to spend. The average work week lengthened, a sign that business is picking up and companies may soon need more workers. And hiring was strong across almost all major industries.

Manufacturing added 23,000 jobs. Transportation and warehousing added 50,000 jobs. Retailers added 28,000 jobs. Even the beleaguered construction industry added 17,000 workers.

A more robust hiring market coincides with other positive data that show the economy ended the year with some momentum.

Weekly applications for unemployment benefits have fallen to levels last seen more than three years ago. Holiday sales were solid. And November and December were the strongest months of 2011 for U.S. auto sales.

Many businesses say they are ready to step up hiring in early 2012 after seeing stronger consumer confidence and greater demand for their products.

Comments

SuxBeanU 2 years, 6 months ago

If these numbers were actually true.....why is the labor-force participation rate still stuck on 64%? These numbers are not about jobs, they are about one person's job.

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LarryMajor 2 years, 6 months ago

The Labor Force Participation Rate is the number of people employed plus the number of people looking for jobs (the unemployed) as a percentage of the general population. Perhaps an easier way to view this is the available workforce – regardless of whether they currently have a job – against the total population, which includes those not seeking employment.

Since the calculations for Labor Force Participation Rate put the employed and unemployed in the same category, the unemployment rate has no effect on the participation rate. What has caused the decrease in the participation rate is the higher percentage of the general population retiring and no longer available for work.

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Mack711 2 years, 6 months ago

How many are Christmas seasonal jobs that will end this month. Many stores hire extra for the Christmas season at part time paying no benefits. These are not permenant jobs.

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Jan 2 years, 6 months ago

I wonder how many jobs could have been added if Republicans had not blocked or watered down every major bill to improve the economy and employment rate.

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R 2 years, 6 months ago

Yeah - how about all those bills from the house that senate leader Harry "Unicorn" Reed has blocked from even coming up for consideration or a vote.

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Jan 2 years, 6 months ago

I assume you mean the ones written to benefit the millionaires that would have damaged the economy even more. And why do you think the Senate should have wasted time on such ridiculous legislation that had no chance of passing?

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R 2 years, 6 months ago

How would they know? they don't READ it before they vote Jan - so I take you did or are you listening to those won't DON'T read? Too busy looking for unicorns...

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kevin 2 years, 6 months ago

Adding 5 trillion to the national debt over the past three years should have dropped the jobless rate to under 6%. But is hasn't because of the misuse of all that money. Obama is the devil indisguise if you haven't figured that out yet.

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JV 2 years, 6 months ago

What creates the job is a healthy economic ecosystem surrounding the company, which starts with the company's customers. A company's customers buy the company's products which, in turn creates the need for the employees to produce, sell, and service those products. If those customers go broke, the demand for the company's products will collapse. And the jobs will disappear, regardless of what companies or entrepreneurs do. Ultimately, whether a company continues growing and creates self-sustaining jobs is a function of customers' ability and willingness to pay for the company's products, not the entrepreneur or the investor capital.

You don't start with jobs, you start with demand. Consumers are 70% of spending. Until we unravel our debt, demand will be limited and companies unwilling to create new jobs in spite of the political nonsense from our politicians.

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SuxBeanU 2 years, 6 months ago

Nice try Jan, the Republicans only control the House, your friends control the Senate and White House. The Republicans passed several bills dealing with jobs and the economy, but everyone died in the Senate. Your side has been trying to blame everything on the Republicans, but that dog won't walk anymore. BTW, when your side had control of the House, Senate and the White House, why didn't they fix the jobs and economy problem? Was it because they didn't have a clue or were they just inept? It certainly wasn't because they were too busy putting together a new budget.

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Jan 2 years, 6 months ago

You obviously either did not read the bills you mention or have no concept of economics. Politicians are famous for misnaming bills to sway public opinion so you cannot judge a bill by its name. These bills were such efforts as reducing taxes for millionaires and deregulating businesses. When you cut the taxes of the wealthiest, the only sure thing that can be expected is for the wealthiest to horde more of the money. When you reduce regulations, no jobs are created and some might even be lost. I am speaking of the efforts to keep the economy rolling, such as the renewal of the payroll tax without strings attached. This would help the economy for it puts more money in the hands of consumers that would boost spending. How can anyone that has observed the adverse effects of the Bush tax cuts still support these efforts of the Republicans to pad the pockets of their big contributors at the cost of everyone else?

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R 2 years, 6 months ago

No jobs are created and may be lost when regulations are reduced? In what manner, the regulators themselves? Or those hired solely to interpret the regulations? Or maybe those hired to write the regulations that require others to interpret? Or those hired to focus on the forms required by regulation? There's is a hiring boom-let of sorts in Washington DC, but sure doesn't appear to be helping the general population...

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kevin 2 years, 6 months ago

It is sad to know that the White House has NOT included in the unemployment figures the thousands of soldiers coming back from the Middle East and can't find a job. I do not think that the Feb or March stats will be so kind to the White House. By then the soldiers will be filing for unemployment money and the surge in part-time Christmas hiring will be long gone and those folks released.

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JV 2 years, 6 months ago

Here's the problem with that logic. The unemployment rate is falling in large part because millions of people have dropped out of the labor market entirely. If the size of the workforce were the same as when Obama took office, the unemployment rate would be 10.9 percent.

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