There were a number of promising signs in this morning’s jobs report pointing that point to a strengthening labor market that’s even better than the top line number, which showed the overall unemployment rate falling to 8.5 percent in December from a revised 8.7 percent in November.
First, the number of part-time workers continues to fall. Employers gave 371,000 workers previously on shortened hours full-time work. While that still leaves 8.1 million people working part-time who would prefer a full 40 hours, the reduction signals business is picking up at many worksites across the country.
Second, the number of discouraged workers fell sharply last month, down 373,000 to 945,000. Since this number isn’t seasonally adjusted, the reduction may have been a temporary blip due to Christmas season hiring. The total number of people marginally attached to the labor force – those who had looked for work at some point in the past year but not in the past four weeks – remained steady at 2.5 million persons. The preliminary signs, though, are that more people are regaining hope of finding a job.
Another positive sign: the private sector added 212,000 jobs last month, the fifth time this year it cracked the magic 200,000 barrier that usually results in driving down the unemployment rate. It was broad-based, too, with manufacturing, retail and mining all posting solid gains. However, the public sector continues to shed workers – down 12,000 jobs.
While the Obama administration will no doubt cheer this latest jobs report – the Treasury Department is holding a briefing later this morning – the reality is that budget austerity in Washington guarantees that thousands of formerly employed public sector workers will be competing for available job slots this year. Those headwinds will continue to temper the good news from the private sector throughout this election year.