The U.S. economy added 200,000 jobs in December and the unemployment rate fell for the fourth month in a row, the government said Friday, in a fresh sign the economy is picking up and businesses are more willing to hire.
The increase in jobs last month — the fourth biggest gain of 2011 — suggests the U.S. is entering the new year with renewed vigor. Faster hiring puts more money in the hands of consumers and usually leads to an increase in spending. That’s a big deal since consumer spending accounts for as much as 70% of economic growth.
The unemployment rate edged down to 8.5% from an upwardly revised 8.7% in November, the Labor Department said.
The U.S. was expected to add 150,000 jobs and the jobless rate was forecast to rise to 8.7% from an initially reported 8.6% in November.
Yet improved job growth in the second half of 2011 still falls well short of what’s necessary to get the U.S. fully back on track. The economy needs to add at least 250,000 jobs a month for several years to reduce the jobless rate to pre-recession levels and boost annual growth well above 3% — a level usually associated with healthy recovery.
The economy has expanded sluggishly since the end of the 2007-2009 recession, mainly because of weak hiring. Businesses do not want to add workers unless they are assured of higher demand for their goods and services.
Once again all the new jobs were added in the private sector: 212,000 overall. Governments eliminated 12,000 jobs to continue a nearly two-year trend of shrinking their bureaucracies to balance their budgets.
The increase in jobs, however, was heavily concentrated in sectors that do a lot of seasonal hiring.
The transportation and warehouse sector, for instance, hired 50,000 workers last month to lead the way, but 42,000 of those positions were for couriers and messengers.
In addition, the retail industry filled 28,000 positions.
Other sectors that increased hiring included manufacturing, mining, health care and the leisure and hospitality trade.
Manufacturers added 23,000 jobs to mark the first big gain in four months.
Also, the mining industry created 7,000 jobs, health care boosted employment by 23,000 and leisure and hospitality added 24,000 workers.
No part of the private sector reduced employment.
Payrolls for November and October, meanwhile, were little changed. In November, the government now says 100,000 jobs were created instead of a prior figure of 120,000. The number of jobs created in October was revised up to 112,000 from 100,000.
Wages and hours worked, meanwhile, rose slightly last month. Hourly earnings were up 0.2% to $23.24; hours worked rose 0.1 hour to 34.4.
An alternative measure of unemployment, the so-called U6 rate, fell to 15.2% in December from 15.6% in November. That rate includes part-time workers and those who recently stopped looking for work.
The economy added 1.64 million jobs in 2011, compared to an increase of 940,000 in 2010. The private sector created 1.9 million jobs last year.
Yet the U.S. still has about 5.8 million fewer jobs now compared to end of 2007. In 2009 alone, the economy lost 5.1 million jobs.
