Economy adds 103,000 jobs in December; Unemployment rate drops

ECONOMY ADDS 103,000 JOBS IN DECEMBER; UNEMPLOYMENT RATE DROPS…. After last month’s dismal jobs report reflecting a very weak employment picture in November, hopes were high that the data for December would be less discouraging.

The good news is, conditions improved in the final month of 2010. The bad news is, the new jobs report points to growth that isn’t good enough, and fell a little short of expectations.

The United States economy ended the year by adding 103,000 jobs in December, the Labor Department said Friday, a number that missed expectations. In addition, the unemployment rate fell to 9.4 percent last month from 9.8 percent. […]

While the overall picture showed improving job growth, the additions in the private sector in December were not enough to significantly reduce the ranks of the unemployed or keep pace with people entering the work force. The outlook remains bleak for many workers. More than 14.5 million people were out of work in December.

Still, economists noted that the jobs data is a lagging indicator and pointed to other signs of a turnaround, though their outlook for 2011 remained varied.

“The U.S. economy finally appears to be picking up steam and headed toward recovery,” said Steven Blitz, a senior economist for ITG Investment Research. “Several economic indicators — including manufacturing and services output, and sales of cars and consumer goods — have shown noticeable improvement over the last few months.”

As has been the case for over a year, all of the job growth is occurring in the private sector. In December, the private workforce grew by 113,000 jobs, while the public sector shed 10,000 jobs. It was the 12th consecutive month of private-sector job growth.

On a slightly more encouraging note, the totals from October and November were both revised upwards, with October’s totals reaching 210,000 jobs, one of the best months of the year, and November’s awful totals being revised to 71,000, up from 39,000.

It’s important to emphasize, though, that while December was better than November, the economy adding 103,000 jobs last month isn’t good enough. Indeed, it’s not even close. To help get us back to where we need to be, we would look for totals more than twice as strong as these.

Still, incremental progress is incremental progress, and most forecasts appear to have relatively high hopes for 2011.

Once again, here’s the homemade chart I run on the first Friday of every month, showing monthly job losses since the start of the Great Recession. The image makes a distinction — red columns point to monthly job totals under the Bush administration, while blue columns point to job totals under the Obama administration.

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