Sun, Jan 08, 2012 - Page 11 News List

US’ jobs picture improves, but risks still remain

AFP, Washington

US unemployment fell for the fourth straight month last month and jobs creation picked up, but economists warned that Europe’s debt crisis and a rise in oil prices could yet scuttle the recovery.

In its keenly awaited monthly jobs report on Friday, the US Department of Labor said the unemployment rate slipped to 8.5 percent as 200,000 jobs were added last month.

The jobless rate was the lowest since February 2009, the month after US President Barack Obama took office amid the worst US recession in decades.

As recently as August, the rate stood at 9.1 percent, and economists cheered the new numbers as evidence that economic growth, feeble throughout much of last year, was gaining traction.

“This is the best possible type of report, as job creation in December was strong and the unemployment rate fell,” Prestige Economics president and chief economist Jason Schenker said.

“This report provides further justification for continued modest optimism about the US economy in 2012,” he said.

Obama, whose political future could hang on how bad unemployment is by the time of November’s presidential election, welcomed the news.

“The economy is moving in the right direction. We are creating jobs,” he said, while urging US Congress to keep supporting stimulus programs for the economy.

The Democratic president has backed government investment to generate more jobs, while opposition Republicans have resisted, arguing that government spending has been holding back private hiring.

A total of 1.6 million jobs were added over the past 12 months, which Obama noted was more than in any year since 2005, but that “a lot” of people were still suffering.

“After losing 8 million jobs in the recession, obviously we have a lot more work to do,” he said.

The report was stronger than generally expected. Analysts on average had forecast a rise in the jobless rate and weaker job gains of 150,000.

“Unfortunately, we need more like 300,000 jobs [a month] to get the unemployment rate coming down consistently and rapidly, and that is not likely to happen this year,” Naroff Economic Advisors president and founder Joel Naroff said.

The number of unemployed people continued to trend down last month, to 13.1 million, after topping 14 million in the middle of last year. Hourly wages and hours worked rose.

However, the data showed the lingering deep strains in the labor market since the recession ended in June 2009.

The number counted as long-term unemployed — persons without a job for 27 weeks or more — barely budged at 5.6 million, or 42.5 percent of the unemployed.

Other indicators were flat, including the labor force participation rate, unchanged at 64 percent.

The private sector again delivered all of the job gains, adding 212,000 last month.

Governments at all levels shed a net 12,000 jobs, a slower pace of layoffs amid strained budgets.

The job gains were broad-based, with jobs added in transportation and warehousing, retail trade, manufacturing, healthcare and mining.

Analysts cautioned that big risks remained in front of the long, slow jobs recovery, including tensions with Iran over its nuclear problem, which could lead to higher oil prices, and Europe’s public debt crisis, which has pushed the 17-nation eurozone to the brink of recession.

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