The last unemployment report of 2010 brought mixed signals for how the economy might perform in 2011, but economist seemed to agree that while improvements will be slow more people would be working in 2011 than they did in 2010.
The report released Friday indicated the unemployment fell to 9.4 percent in December 2010, its lowest in 19 months and a good decline from Novembers 9.8 percent. The economy added just 103,000 jobs in December, much less than expected. It takes approximately 125,000 new jobs per month to sustain positive job growth.
Still, some analysts believe that the unemployment rate is due for another upswing as the long-term unemployed who’ve given up finding work re-enter the job market with renewed optimism and will thus be counted in the figure again.
“The job numbers weren’t as good as hoped for, but they weren’t bad,” said Mark Zandi, chief economist at Moody’s Analytics. “The 103,000 gain in payroll jobs, plus the upward revisions in the previous two months, puts the December level of employment close to expectations.”
Zandi also questioned the value of the four-tenths of a percentage drop in the unemployment rate. Some analysts contribute the decline to seasonal hiring.
“I wouldn’t read anything into the unemployment rate decline given the ongoing decline in the labor force,” he said. “My sense is that it is still near 10 percent.”
Getting a closer look at the unemployment numbers from the Bureau of Labor Statistics indicates the amount of time people remain without a job is increasing to an average of 34.2 weeks. Dating back to July 2010 the high was 34.8 weeks and the second highest number in the reports 63-year history of the duration of time the unemployed remained without a job. In the past unemployment benefits lasted 26 weeks, but under the Bush-era tax cuts unemployment has been extended to 99 weeks; 26 weeks plus the 73 federally assisted weeks of benefits.
The unemployment report did offer some good news.
About 70,000 new jobs were added to earlier reports from October and November. Temporary hiring was up by almost 16,000 jobs in December. The health care and hospitality sectors are showed strong job creation numbers.