“This is a step in the right direction,” said Heidi Shierholz, an economist at the Economic Policy Institute. “However, it is important to note the context: The jobs deficit left from losses in 2008/2009 remains well over 10 million jobs; even at December’s growth rate, it would still take about seven more years — until around 2019 — to fill the gap.”
House Speaker John Boehner (R-Ohio) cheered the report, even as he noted that the nation’s labor market remains troubled.
A closer look at the December unemployment figures.
“It’s good news that more Americans found work last month despite a sluggish economy, but both parties must come together and do more to address the ongoing uncertainty that small businesses face,” he said in a statement. “Today marks the 35th consecutive month of unemployment above eight percent, and too many Americans continue to struggle to find their next job.”
Senate Majority Leader Harry Reid (D-Nev.) echoed the president in using the report to push for extending the payroll tax cut through 2012.
“Creating jobs must continue to be Congress’s top priority. While the economy has shown signs of improvement, that is no consolation for the millions of Americans who are out of a job and struggling to make ends meet in Nevada and across the country,” Reid said. “The first thing the Senate must do to strengthen our economy is extend the payroll tax cut for the remainder of this year. This middle-class tax cut is vital for 160 million American workers who count on this money to help them put food on the table and heat their homes this winter.”
U.S. markets opened mostly lower despite the strong labor report. But in Europe, the major indexes were up.
The report revised the November unemployment rate to 8.7 percent from an initial report of 8.6 percent, while adjusting the number of new jobs added that month from 120,000 to 100,000.
The jobs report builds on a several new indicators pointing toward an economy on the upswing.
The government reported Thursday that claims for unemployment benefits declined in the final week of December, moving the average during the past four weeks to its lowest level in more than three years.
Auto sales in December were up, continuing their substantial improvement from the summer. And for all of 2011, vehicle sales rose 10 percent.
On Thursday, several analysts cautioned not to make too much of the good news too soon.
Bernard Baumohl, chief economist for the New Jersey-based Economic Outlook Group, said that regardless of what happens with the December unemployment number, the economy faces major hurdles in 2012.
Europe’s economy is teetering on the edge of recession, and China’s roaring economy is beginning to cool, he said, developments that pose substantial risk to U.S. economic and employment growth. In addition, he said, oil prices are likely to rise next year as tension increases in the Persian Gulf and the broader Middle East.
Meanwhile, he added, business and individual consumers are likely to cut back, after a relative spending binge that helped increase economic growth by an estimated three percent in the final months of 2011. “The recent uptick in shopping, while cathartic, is simply unsustainable,” the firm wrote in its 2012 economic forecast.
Any or all of those factors could slow job growth in the early months of 2012.
“I have my concerns that the pace of job growth will likely slow in the first half of this year as the economy slows,” Baumohl said. “We just do not have a basis for optimism that the economy or job market has turned the corner.”
Staff writers Felicia Sonmez and David Nakamura contributed to this report.
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