Employment Figures Hint at Happy New Year

Despite the fact that the number of people seeking unemployment benefits rose last week after three weeks of declines, suggesting that more than a few people had an unhappy Christmas, data suggests that the number is at a level consistent with a modest pick-up in hiring. According to USA Today, that data encourages opinions that job growth could pick up in 2012, something that would be welcomed by everyone. To be specific, those numbers see weekly applications increase by 15,000 to a seasonally adjusted 381,000 for the week ending December 24, according to the Labor Department. The article states that, “The four-week average, a less volatile measure, dropped for the fourth straight week to 375,000. That's the lowest level since June 2008, before the financial and housing markets meltdown that precipitated a recession.” We are not out of the woods yet though – applications have to drop below 375,000 consistently before the Labor Department will deem the hiring numbers strong enough to drop the unemployment rate. According to USA Today, “A survey of 36 economists by the Associated Press this month found that they expect the economy will generate an average of about 175,000 jobs per month in 2012. More small businesses plan to hire than at any time in three years, a trade group said earlier this month. And a separate private-sector survey found more companies are planning to add workers in the first quarter of next year than at any time since 2008.” This has much to do with the fact that, while layoffs have fallen since mid-2009, skeptical companies are slow to bring people in again for fear of repeating the cycle. The article states that, “Hiring has improved in recent months. Employers have added an average of 143,000 net jobs a month from September through November. That's almost double the average for the previous three months. Next year should be even better. In November, the unemployment rate fell to 8.6% from 9%. Still, about half that decline occurred because many of the unemployed gave up looking for work. When people stop looking for a job, they're no longer counted as unemployed.” Economists still believe that the hiring rate is encouraging, reflecting some modest improvement in the economy. “One potential drag on the U.S. economy going forward is the situation in Europe, where many of the nations are almost certain to fall into recession in 2012 because of their massive government debts, among other factors. And without more jobs and higher incomes, European consumers may have to cut back on spending. The same will be true of U.S. consumers if the economy can't continue the momentum of 2011's last quarter. Congress removed one potential threat last week when it agreed to extend a payroll tax cut and to keep emergency unemployment benefits for two additional months. Both programs were scheduled to expire at the end of this month. Economists worried that ending the tax break and the extended unemployment benefits program would have left Americans with less money to spend.”