HRPDC economics staff tracks employment data and other economic indicators to better provide technical analysis and forecasting of the Hampton Roads economy.
National payrolls expanded by 200 in December 2011, resulting from an increase of 215 private sector jobs and a decrease of 15 government jobs. The U.S. has gained jobs for 15 consecutive months, capping a year that had a 1.64 million increase in payrolls, and December’s employment growth was 50% above the 2011 average of 137 added each month to payrolls. The 200 number beat the consensus estimate of 155 jobs (Dow Jones Newswire). To compare, Hampton Roads lost 3 jobs in 2011 through the month of November.
The seasonally adjusted U.S. unemployment rate also continued its decline, falling to 8.51% from 8.65% in November and 9.37% in December 2010. (the consensus estimate for December 2011 was 8.7%). This decline came as the labor force participation rate remained constant, indicating that an improved employment situation drove the entire decline in the unemployment rate. This was further demonstrated by the U6 unemployment rate falling to 15.2% from 15.6% in November and 16.2% one year ago (U6 is the broadest measure of unemployment and includes disaffected workerss and those who are part-time for economic reasons).
The University of Michigan survey of Consumer Sentiment also improved, increasing to 69.9% in December from 64.1% in November. This survey correlates strongly to both gas prices and a stronger U.S. labor market. Higher national levels of consumer confidence indicate a better outlook for the Hampton Roads tourism industry.
While accelerating employment gains show an improving economy that will build on itself, it is important to put the employment and unemployment situation into context. If the nation continues to add 200 jobs per month, it will close the employment gap created by the past recession at some point in 2024. The unemployment rate reflects the approximately 31 people who have left the labor force, and the labor force participation rate stands at 64.0%, well below the historic norm of between 66-67%.