Economy added 155,000 jobs in December; unemployment rate 7.8%

7:42 AM, Jan 4, 2013   |    comments
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Doug Carroll, USA TODAY

The economy ended 2012 with 155,000 more jobs last month and a 7.8% unemployment rate.

In November, the unemployment rate was 7.7%.

Ahead of today's Labor Department report, many economists had forecast the economy added 150,000 to 160,000 jobs overall in December. But job market data released Thursday raised the prospect of a positive surprise.

Payroll processor ADP on Thursday said its monthly survey found private employers added 215,000 jobs last month, far more than expected. And outplacement firm Challenger, Gray & Christmas said announced job cuts in December fell 43% from November to the second-lowest monthly total of the year.

Initial jobless claims for the past week did jump, but analysts pointed out they're often distorted by year-end holidays. The four-week moving average - which smooths out weekly distortions - was little changed.

The last monthly data on the 2012 job market enhances the picture of an economy still healing from the deep recession that began five years ago last month and ended in mid-2009.

Not counting December, U.S. job gains have averaged fewer than 155,000 a month the past two years. Economists say the number should be twice that to keep up with population growth and support a healthy economy.

The unemployment rate did fall the past year - from 8.5% in December 2011 - but some of that improvement has come from people leaving the labor force. Some retired and some went back to school. But when jobless workers stop looking for jobs, they're no longer counted as unemployed.

Since the recession's official end, the number of Americans 16 and over who aren't in the labor force - meaning they're either employed or seeking employment - has grown by about 8 million.

USA TODAY

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