Press Release - Statement on the Employment Situation in December

WASHINGTON, DC – Alan B. Krueger, Chairman of the Council of Economic Advisers, issued the following statement today on the employment situation in December. You can view the statement HERE.

The Employment Situation in December

Posted by Alan B. Krueger on January 06, 2012 at 9:29AM EST.

Today's employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression. It is critical that we continue the economic policies that are helping us to dig our way out of the deep hole that was caused by the recession that began at the end of 2007. Most importantly, we need to extend the payroll tax cut and continue to provide emergency unemployment benefits through the end of this year, and take other steps the President has proposed in the American Jobs Act.

Private sector payrolls increased by 212,000 jobs and overall payroll employment rose by 200,000 jobs in December. The unemployment rate fell 0.2 percentage point to 8.5 percent, the lowest level since February 2009. The drop in unemployment over the month was mostly due to employment growth, not lower labor force participation. The unemployment rate has fallen by 0.9 percentage point in the last 12 months. Despite adverse shocks that have created headwinds for economic growth, the economy has added private sector jobs for 22 straight months, for a total of 3.2 million payroll jobs over that period. In the last 12 months, 1.9 million private sector jobs have been added on net in 2011, more than in any year since 2005. Nonetheless, we need faster growth to put even more Americans back to work.

Sectors with net job increases in December included transportation and warehousing (+50,200), health care and social assistance (+28,700), retail trade (+27,900), manufacturing (+23,000), leisure and hospitality (+21,000), and construction (+17,000). Local governments lost 14,000 jobs and state government employment was unchanged.

The monthly employment and unemployment numbers are volatile and employment estimates can be subject to substantial revision. Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.

Alan B. Krueger is Chairman of the Council of Economic Advisers