A good jobs report — and a good year
The December jobs report is good news. Very good news. Payrolls increased by 200,000 -- and the growth was spread relatively evenly across the economy. Retail added 28,000 jobs. Manufacturing added 23,000 jobs. Transportation and warehousing added 50,000 jobs -- 43,000 of them in the “couriers and messenging” subcategory, which suggests some of those gains are temporary holiday hires. Health care added 23,000 jobs. Food services added 24,000. Mining added 7,000 jobs. The only payrolls that shrunk in December were government payrolls: we lost another 12,000 public-sector jobs.
The December numbers also give us an opportunity to step back and look at 2011 as a whole. The economy gained 1.9 million private-sector jobs and lost 280,000 public-sector jobs. The unemployment rate dropped from 9 percent to 8.5 percent. U6 -- the economic pain measure that combines formal unemployment, marginally attached workers, and workers who are part-time but wish to be full-time -- dropped from 16.1 percent to 15.2 percent.
And, in many ways, 2011 was a better year for the economy than it seemed at the time. As more accurate data has streamed in, the Bureau of Labor Statistics have revised its estimates upwards for many months. For instance: The December jobs report is the best jobs report since September, when the economy added 210,000 jobs. But we only know that now. When the September jobs report came out, the initial data showed that we added 103,000 jobs. What seemed like a disappointment was actually a very strong month for the economy. (By the same token, the December numbers could be revised up or down in the coming mopnths.)
Of course, the fact that the economy is recovering does not mean it is recovered. Unemployment is 8.5 percent -- and, if not for the millions of discouraged workers who have left the labor force since 2008, it would be nearer to 11 percent. It’s nice to add 200,000 jobs in a single month, but, as this graph from the Hamilton Project shows, at that rate, it will take well over a decade to fully recover from the Lesser Depression.
So there’s work to be done. And we have the tools with which to do it. As I wrote in Wonkbook this morning, an expanded payroll tax cut, a major effort to encourage refinancing in the housing market, infrastructure investment, and much more could be leveraged to accelerate the recovery. If we are adding jobs more slowly than we need to be, that is, in large part, the fault of Republicans and some Democrats in Congress who refuse to sign onto tried-and-tested methods of creating jobs in recovering economies.