The Bureau of Labor Statistics released the December jobs report Friday. For once, the news was uniformly good.
The economy added 200,000 jobs in December -- a figure made up by 212,000 jobs created in the private sector and 12,000 jobs lost on the government side. The unemployment rate fell to 8.5%, and is now down sharply and consistently from when the recession officially ended in the summer of 2009.
Source: Bureau of Labor Statistics.
A broader measure of unemployment that includes those who have given up looking for work fell as well, dropping by 371,000 to 15.2% -- the lowest level in nearly three years. For the first time in a while, the traditional unemployment rate fell mainly because jobs were being created, not because people were dropping out of the labor force (although the size of the labor force still in fact fell for the month).
This is great news. When the unemployment rate fell in October and November, some worried it was a statistical blip bound to inch higher again. After December's jobs report, that doesn't look to be the case. In fact, job creation over the last couple of months has been revised higher in a fairly big way. In August, we were originally told a net zero jobs were created for the month. Turns out it was a gain of more than 100,000. September's jobs number was originally reported at 103,000. It was later revised up to more than double that amount.
In total, 1.6 million jobs were created last year -- the most since 2006, and the fourth-highest year of the last decade. From 2001 through 2008, the economy lost a net 3.2 million jobs. Since 2010, it has gained 2.6 million. Last month was actually the best December jobs report since 1999, and the 10th-best of the last 30 years.
Those who already have jobs are doing better as well. The average number of hours worked rose by a tenth of an hour to 34.4 hours per week in December. Average pay rose, too, up 0.2% to $23.24 an hour. If you have a job, you're working longer hours for higher pay -- exactly the conditions that need to exist before employers are tempted to hire more workers.
And jobs are sprouting up in a wide range of industries. Since bottoming in 2009, the manufacturing sector has gained more than 300,000 jobs. Almost 1 million health-care jobs have been added since 2009. Nearly 300,000 hospitality jobs were added last year alone. Even construction jobs, ravaged ruthlessly during the recession, saw a slight rebound last year. In October, Ford
These numbers might scare off fears that we're heading back into recession. Still, take them with the appropriate grain of salt. The job market has seen several temporary spikes of hope over the last three years that fizzled out within months. The latest jump may be no different.
More importantly, the recent gains pale in comparison to the losses suffered during the recession. The economy needs to add about 150,000 jobs a month just to keep up with population growth, so last month's gain reduced the ranks of the unemployed by maybe 50,000, compared with more than 8 million jobs lost during the financial crisis. At December's rate of gain, the economy wouldn't return to prerecession job levels until the early 2020s. At double last month's gain -- equivalent to the growth seen in the late 1990s -- it would be another two years before victory over the recession could be declared.
This is our new, somewhat ironic reality: Jobs growth right now is fairly normal and healthy. It just feels bad because we're coming off such a miserable decline. We need spectacular, above-average jobs growth just to feel normal these days. And so far, we're not getting it.
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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool owns shares of Ford Motor and Google. Motley Fool newsletter services have recommended buying shares of Ford Motor, General Motors, and Google. Motley Fool newsletter services have also recommended creating a synthetic long position in Ford Motor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.