Total U.S. employment grew by 200,000 positions in December,
while the unemployment rate fell from an adjusted 8.7 to 8.5
percent. Government payrolls lost just 12,000 positions over the
month, though the total is down 280,000 from a year ago.

A falling unemployment rate can occasionally report false
positives-which could have happened last month-when the number of
unemployed people counted is reduced because discouraged workers
having not looked for work in the preceding month. In December’s
figures, however, the number of people who have searched for a job
in the previous 12 months, but not in the last four weeks, actually
declined both sequentially and year-over-year. Similarly, the
workforce participation rate remained unchanged at 64 percent. All
in all, what appear to be positive top line numbers don’t seem to
have any significant underlying red flags observed in a number of
reports throughout 2011.

December 2011 Employment

Transportation and warehousing positions rose by 50,000, with
four-fifths of those coming from seasonally high employment in the
courier and messenger industry. This would include the likes of
FedEx and UPS, but not the U.S. Postal Service, which also added
2,600 positions. Retail trade added 28,000 positions led by general
merchandise and clothing stores. They were countered, though, by a
loss of 10,200 jobs by sporting goods, hobby, book, and music
stores, likely the result of the continued closing of the Borders
Books and Music chain. Other industries that saw gains included
food service and drinking places, healthcare, manufacturing, and

Professional and business services, after adding an average of
more than 40,000 jobs per month for most of the year, slowed during
November and December, adding just 19,000 and 12,000 jobs
respectively. While such employers do often complete critical hires
during these months, total hiring will slow down due to holidays
and vacations. Year-over-year, the management and professional and
related occupation unemployment rate fell from 4.6 to 4.2 percent.
The number of people employed in such positions rose by 1.1 million
from a year ago, representing the lion’s share of the 1.5 million
positions created in the workforce overall.     

A significant portion of the jobs created in December came from
industries likely to be impacted by the holiday shopping
season-jobs that are temporary by nature. However, the level at
which this hiring took place indicates an increased confidence from
these employers, likely because of what they were seeing in their
business. Should this confidence carry over to the rest of the
economy, other professional services and manufacturing businesses
should, hypothetically, see similar boosts in the coming

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