Economy adds 157,000 jobs in December

AP (via Yahoo!) ^ | 1/7/05 | Leigh Strope

[The G Man]

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December Hiring Helps Fuel Job Growth

4 minutes ago

By LEIGH STROPE, AP Labor Writer

WASHINGTON - U.S. employers added 157,000 workers overall to their payrolls in December, bringing the year-end total of new jobs to 2.2 million, the best showing in five years. The unemployment rate held steady at 5.4 percent.

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The Labor Department (news - web sites) reported Friday that the 2.2 million new jobs created in 2004 were the most in any year since 1999, when employers added 3.2 million positions, based on a government survey of businesses.

In 2003, there was a net 61,000 reduction in payroll jobs.

The figures capped a presidential election year in which job creation was a big concern to many voters, and a potential liability to President Bush (news - web sites). Job growth had been slow since the 2001 recession, puzzling economists and policy-makers expecting the labor market to bounce back more quickly. Democrats seized on the weak performance, claiming the president's economic policies were not working.

But ultimately, the economy wasn't enough of a concern to deny Bush a second term.

Looking ahead, the Bush administration predicts the economy will create another 2.1 million jobs in 2005 — a figure that private economists said would be respectable. Still, that's a much lower estimate than a previous administration forecast of 3.6 million new jobs this year.

The Federal Reserve (news - web sites) boosted short-term interest rates last month for a fifth time, saying that "labor market conditions continue to improve gradually."

[jrestrepo]

"But ultimately, the economy wasn't enough of a concern to deny Bush a second term."

I love that line...

[philsfan24]

does anyone know where this brings bush in terms of total employment when he came into office? all you heard from the democrats was that bush would be the first president since hoover to have jobs lost under his watch. its gotta be close to a net gain. november and december still need to be upwardly revised so if its close, then he should have a gain. not bad for inheriting a recession and dealing with 9/11 and war.

[1LongTimeLurker]

does anyone know where this brings bush in terms of total employment when he came into office? all you heard from the democrats was that bush would be the first president since hoover to have jobs lost under his watch. its gotta be close to a net gain. november and december still need to be upwardly revised so if its close, then he should have a gain. not bad for inheriting a recession and dealing with 9/11 and war.

If you include government jobs created in his term, there has been a net gain, if you exclude government jobs, there has been a small net loss.

[KMC1]

Pretty darn nice!

[Preachin']

Is the Clinton recession over, yet?

His policies killed our economy.

[AD from SpringBay]

So the depression continues another season. Where is our FDR?

[blakep]

Journalists who report on economics, should take an economics class. Take this from L Kudlow

Dollar Rotation

In the waning days of 2004 a Wall Street Journal story noted that China-related shipping and tanker rates were plummeting. This was the first indication of a change in the commodity outlook. The strong implication was that higher commodity prices (including energy) were causing a softening in China demand. This comes on top of domestic Chinese efforts to tighten credit and slow the economy.

Soon after news came from the Fed that inflation may be more of a concern to the central bank than many observers thought. The idea of a Fed rate-hiking pause after their early February meeting has been thrown out the window. Futures markets have all along been predicting a 3.5 percent fed funds target, but many investors and traders chose to ignore those signals. Presently the funds rate is a 2.25 percent.

At the turn of the new year the vast majority of pundits expected the dollar to continue to slide. Yours truly disagreed, arguing that lower tax-rates, monetary restraint, and solid economic growth was a prescription for a dollar rebound. Since December 30, both the broad and the narrow dollar indexes have appreciated more than 3 percent. The dollar-euro cross rate has improved 3.5 percent in favor of the greenback.

And commodities have hit the skids. Gold is off 5 percent, spot metals are off 4.5 percent, futures are off 2.5 percent, and the broad spot commodity index is off 4 percent. The net drop in oil since late October has been nearly 20 percent. The fall in the Baltic dry index (raw material goods shipping) has been 29 percent. On the oil front, the tanker rate on the Arabian Gulf to Singapore route has dropped 77 percent since early November.

Shortly after the November election, in a media opportunity in the Oval Office with Italian President Silvio Berlosconi, President Bush linked his fiscal policies of lower taxes, Social Security reform, and intensified budget restraint to the Fed’s efforts to drain excess cash and raise their target rate. Bush explicitly mentioned the need for a stronger dollar. This was the first time the President had taken this up, and the first time he linked his fiscal strategy with the Fed’s monetary restraint. Most folks ignored this signal. They shouldn’t have.

The stock market is responding to the changing environment for commodities and the dollar. A stronger greenback is usually good for consumers and financial companies. A weaker greenback generally helps raw materials producers, manufacturers, and energy.

Looking at the sell-off in the broad big cap S&P 500, which has dropped nearly 2 percent since December 30, materials, utilities, and info-tech have suffered the worst. The all-time high Dow transport index has come off about 2 percent. Consumer staples and financials did the best.

But the formerly white hot small cap S&P 600 index makes the picture even clearer. Down 4.25 percent overall, the worst groups have been info-tech, materials, industrials, and energy. This is in response to the stronger dollar. The best performers have been consumer staples, telecom services, and consumer cyclicals.

This market rotation in response to a potential dollar turnaround does not signal a collapsing U.S. economy. Profits and productivity remain the centerpiece growth drivers, along with low tax-rate incentives and a positively-sloped yield curve that denotes ample liquidity.

But if the bloom is off the China rose, then tech and basic industries may continue under pressure. Consumers benefit from lower dollar denominated prices. Financials will continue to do well in the new environment. Barring a total commodity collapse, softer prices are still well above profit breakeven points. But the sizzling rate of advance of those sectors is going to give way to a more market neutral position.

[KwasiOwusu]

"But ultimately, the economy wasn't enough of a concern to deny Bush a second term"

2.2 million jobs created in 2004, the best performance since 1999, a very low 5.4 % unemployment, plus scorching 4.4% GDP growth in 2004, and the angst ridden Bush-ahating vermin at the pathetic Associated Press are still claiming the US economy was bad in 2004!

Can you believe these AP A**HOLES?

[Jet Jaguar]

Still...deeply saddened.

[RandallFlagg]

Still...deeply saddened.

AND unemployed.
*snicker*

[talleyman]

"We're doomed!"

[griswold3]

If you repeat a lie long enough it will become the truth. The economy is what you make it and we made it strong.

[cspackler]

Breaking news headline in foxnews.com...

Link

"December Job Growth Falls Short of Forecasts"

Doom and gloom...

[rdb3]

If you include government jobs created in his term, there has been a net gain, if you exclude government jobs, there has been a small net loss.

You speak with such certainty. Now back it up and show me a source.

[OXENinFLA]

**Ahem**

< dem speak>THIS IS THE WORST ECONOMY SINCE < /dem speak>

We now return you to your regularly secluded insanity.......

[xzins]

since 1999, when employers added 3.2 million positions,

The Clinton bubble then burst and that government hyped exuberance came crashing down....instantly 2/3 of those jobs from "paper money" and "high tech inflated companies" disappeared.

Then the airline industry crashed after 9/11, the economy took a hit, and enron further eroded confidence in corporate honesty and stocks.

[The G Man]

Yep. Sure is.

[TennLawyer]

The bottom line is that given the irrational exuberance of the late 1990's which artificially propped up Clinton, Bush has done a fantastic job with the economy and jobs. I see a long period of steady growth, which is reflective of our President - strong and steady.

[TennLawyer]

And I forgot to mention 9/11 as xzins pointed out. The havoc that event played on the economy cannot be understated.