US unemployment holds steady at 7.8% as economy adds 155,000 jobs

U.S. non-farm payrolls show continued trend of slow improvement. The U.S. economy added 155,000 jobs in December, while the rate of unemployment remained steady at 7.8%. U.K. services sector disappoints with unexpected first contraction in two years…



Powered by Guardian.co.ukThis article titled “US unemployment holds steady at 7.8% as economy adds 155,000 jobs” was written by Matt Williams, for guardian.co.uk on Friday 4th January 2013 14.51 UTC

The US economy added 155,000 jobs in December, continuing a trend of stubbornly slow improvement.

The Bureau of Labor Statistics said the rate of unemployment remained steady at 7.8% in December. November’s rate was revised up to 7.8% from an initially reported 7.7%.

The figures are largely in line with analysts’ expectations, with broadly distributed gains in employment across sectors from construction and manufacturing to healthcare.

“It was a decent employment report”, John Lanski, chief economist at Moody’s Capital Markets said. “I cannot see any glaring negatives in this report.”

In all, employers added 1.84 million jobs in 2012, in line with the previous year. It represents steady, if not stellar, improvements ion the jobs market. Nonetheless the gains – at roughly 153,000 additional jobs a month – represents continued momentum in the recovery from the 2007 to 2009 recession.

It also suggests that employers were not spooked by December’s fiscal cliff negotiations, which had brought America to the brink of triggering an austerity package that many economists said could plunge the US back into recession.

“Fiscal cliff related uncertainty isn’t apparent. It certainly doesn’t jump out of you in the report,” Lanski said.

There were some indications in the report of the sluggish and fragile nature of the recovery. Despite the headline rate holding steady, the number of Americans out of work increased by 164,000 to 12.2 million.

And the number of long-term unemployed remained essentially unchanged at 4.8 million, accounting for 39.1% of those out of work.

The unemployment figures come from a separate survey of households, while the payroll count comes from data from businesses. But Friday’s data suggests that layoffs continue to decline. Meanwhile the number of people seeking unemployment aid in the past month dropped to a near four-year low.

“It’s not a booming economy, but it is growing,” Jim O’Sullivan, economist at High Frequency Economics said.

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