January 6, 2012

December Employment Report a Mixed Bag

Bruce Yandle

Distinguished Adjunct Fellow

The Bureau of Labor Statistics (BLS) December 2011 Labor Situation Report brought some welcome news on the economy. Unlike the weather report in Chicago and the Northeast, the BLS data suggest that, with 212,000 additional private sector jobs, labor markets are beginning to thaw. With the number of employed rising and the size of the labor force falling a bit, the unemployment rate fell slightly to 8.5%.

The larger sector gains seem to reflect rising consumer confidence and related retail sales and Christmas shipping. The number of individuals employed as messengers and couriers (read: FedEx and UPS) rose 42,000. Retail employment rose 28,000, and manufacturing employment also rose 28,000. There was no meaningful increase in construction and government employment. Those sectors are still pretty much iced over.

The improved employment picture also indicates the relatively strong demand for experienced and college-educated workers. The unemployment rate for those 25 and older with a bachelor's degree fell to 4.1%. With strong demand for the educated, the unemployment rate for those with less than a high school diploma rose to 13.8%.

Even with some welcome good news on the labor front, the economy is still moving on a bumpy road with some large potholes generated by European uncertainty and payroll tax and other uncertainty in Washington.

Yes, some parts of the economy seem to be thawing, but some chilly winds are still blowing.