Despite the economic uncertainty caused by the fiscal cliff,
155,000 jobs were added
in December, which was on par for 2012 where the average number of monthly
jobs added was 153,000. This monthly gain brought the year-end total of jobs
created to 1.84 million. The unemployment rate was unchanged from the revised
November number of 7.8 percent, which is the lowest it has been since December
All-in-all economists find this report to be unsurprising.
Employers didn’t panic in December before a deal could be struck in Washington,
but they also didn’t go out on a limb to increase hiring over what was done in
previous months. It appears as if the economy is moving sideways and robust
growth is still far from reach. This isn’t expected to change in 2013.
So What Did Grow?
The sectors that experienced the most growth were health
care (+45,000), food services and drinking places (+38,000) and construction
The strong job growth in health care is not surprising as
this is an industry that suffered little during the Great Recession and
continued to see strong growth even while all other industries were suffering.
Demand for health care services is high due to both an aging population and
health care reform. The PayScale Index has also shown wage
growth in the health care industry to be relatively strong over the last
six years, mirroring the employment growth.
Job growth in the construction sector is an encouraging sign
for the economy as this sector took a heavy hit in 2009, both in terms of jobs
and has seen very little recovery until recently. Much of this growth is likely
attributed to rebuilding efforts from Hurricane Sandy, but there has also been
a solid increase in the demand for new housing construction. The U.S.
Department of Housing and Urban Development found the demand for
building permits in November 2012 increased almost 30 percent over November
5-Year Anniversary of the Great Recession
The Great Recession officially started in December 2007 and thus
December 2012 marked the 5 year anniversary of its start. Everyone keeps
talking about how the recovery is sluggish and recessionary effects are still
being felt throughout the economy, but what really has changed since the onset
of this recession in terms of employment?
Below is a chart looking at the number of employed persons
from December 2007 until December 2012. As you can see, employment dropped
significantly between December 2007 and December 2009 – roughly 8 million jobs
were lost. Since December 2009, roughly 5 million jobs have been added. In
other words, we have come a long way, but we still have far to go. Lackluster
job reports like that from December 2012 are not very encouraging when
considering the ground that still needs to be recovered to simply get back to
pre-recessionary employment levels, let alone expansionary levels.
Bardaro is the lead economist and director of analytics for PayScale.com.
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