The Bureau of Labor Statistics released its December jobless report last week and the good news is we added 200,000 jobs in the U.S. in December. Analysts were expecting a gain of 155,000. This dropped the unemployment from 8.7 in November to 8.5 for December. Jobs were added in transportation, warehousing, retail, manufacturing, health care and mining.
The bad news is that average hourly earnings were relatively unchanged. Also, 44% of the jobs added, according to Advisor One and ITG’s Chief Economist, Steve Blitz were comprised of low paying jobs, such as messengers, couriers, restaurant employees and retailers. This is not surprising considering the holiday season. There was no real increase in jobs in; information, financial activities and professional business services.
The long period of high unemployment will leave a scar. The longer a person is out of work, especially a person in a high paying position the less likely they are to find a job or at least find one that will pay them what they were making. This creates a class of underemployed and or unemployed (not counted—if they have been unemployed for an extended period). According to the Wall Street Journal, a person’s earning potential drops 1% per month for each month they are unemployed. This lost income could follow workers for years.
So, in this election year be skeptical of statistics when reported in the headlines. Yes, lowering unemployment is a good thing. Is it real, will it last, are they quality jobs? These are too much for a headline, so be mindful of a politician’s ability to “wink” at statistics, if you’ve forgotten, check out my August 26, 2011 blog, “when a wink can be partially blinding”. And make sure you vote in 2012, let your voice be heard.
