US Employment alert
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Unemployment rate (Dec) 8.5% 8.7% 8.7%*
Non-farm payrolls change (Nov-Dec) 200k 155k 100k**
Average weekly hours (Dec) 34.4 34.3 34.3
* Revised from 8.6%
** Revised from 120k
Much as economists and politicians have moaned about the slow progress of US job generation in the post-recession period, December is the 15th consecutive month in which employment has gone up. The US economy is still well away from reinstating the nearly nine million jobs that disappeared in 2008-09 but the pace seems to be warming up. Just short of a million jobs reappeared in 2010 and the tally for 2011 was to the right side of 1.5 million. Progress at that rate is not enough to eat into the backlog of unemployment but it does just about keep up with demographic growth, as evidenced by the weekly jobless claims numbers which have plateaued.
Ahead of today’s announcement a poll of 84 economists revealed forecasts of an increase ranging from 80k-220k. The median prediction was 155k and the average 158k. Wednesday’s ADP employment change report, which looks only at the private sector, showed an increase of 325k, the highest since ADP began its monthly survey in 2001. With that in mind, investors tended to shade their expectations for non-farm payrolls towards the higher end of the range and the “whisper number”, the figure the market was actually gearing up for, was around 200k this morning.
And the whisperers had it right. The Bureau of Labor Statistics reported 200k new jobs in December, with the unemployment rate falling to 8.5%. Although revisions to previous months took a little shine off the payrolls figure, the number of people in non-agricultural employment at the end of 2011 was 131.9 million, compared to 130.3 million at the end of 2010. The 1.64 million increase is not insignificant.
The relative lack of reaction to the data confirmed that investors had not been particularly surprised by them. Against the pound and the euro the dollar oscillated across a half-cent range before stabilising. Half an hour after the announcement both were nursing slight losses of about a third of a cent.
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