Hiring On The Rise? Part 2

I am not sure that today’s government report on employment settled much. The addition of 200,000 jobs in December, and the decline in unemployment to 8.5%, are both noteworthy, but are hardly the stuff of legends. This is probably why the stock market yawned at the news.

Yes, that’s much better than it could have been. And, yes, the unemployment rate is edging down. But, we are all tired of having to use words like “edging”. We need a good old fashioned surge. Which, of course, we are not about to see.

On the brighter side, activity was widespread and not concentrated in just one industry. This suggests continued growth and supports the recent steady stream of data indicating improvement. Yet at this pace, better though it is, we would take years to erase the huge loss of jobs generated back at the height of the crisis. We need months of 300,000+, lots of them, before the crisis abates fully. Until then we take what we can and use words like “edging”.

On the negative side: the addition of new jobs was more significant in seasonal industries. This may imply an error in the adjustment process similar to that we all suspect in the ADP data released yesterday. If so, this 200,000 may suddenly turn out to be a lot less in reality.

One point of interest: there is an odd political twist in the data. December’s numbers mean we close 2011 as one of the largest declines in government jobs in history. Indeed the decline in government jobs in 2011 adds to what is now a record. Total government employment in the US has declined more under Obama than under any other president. It is down 2.6% over the last three years. Compare that with the 2.2% decline in Reagan’s first three years. Admittedly a significant portion of this decline came at the State level, where 2011’s 1.2% drop in employment was the largest since 1955, bringing thew three year drop to 2.2%. Still, State’s added 1.2% during the same period under Reagan. Evidently the mantra that Obama is bulking up the bureaucracy is just rubbish. Not that our Republican friends will mention this. Facts can often get in the way of a good yarn. Besides I doubt that the displaced workers are in a hurry to be part of a record that can only add to our jobs problem.

So.

Is hiring on the rise?

Yes. Maybe not as fast as the data suggests – those seasonal adjustments look a little dodgy. But things are looking up.

In an edging kind of way.