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."

[xzins]

I agree. The president has done an outstanding job with the economy.

The rules as I remember for deficit spending are that it is NECESSARY: in time of war and time of recession. President Bush has had to deal with both and is still in the middle of a war.

We should be a bit easy on him regarding the deficit spending.

BTW, welcome to FR.

[Woodman]

Thanks rdb3, that was the same question I had. It may well be true, but when pronounced with such certainty I would like to see a link to some source (such as Bureau of Labor Statistics or equivalent).

[NC28203]

Tables can be found at
http://www.bls.gov/data/home.htm

Seasonally adjusted Payrolls
Total Non-farm January 2001 132,388,000
Total Non-farm December 2004 132,266,000

Seasonally adjusted Payrolls
Total Private January 2001 111,560,000
Total Private December 2004 110,550,000

Seasonally adjusted Payrolls
Total Government January 2001 20,828,000
Total Government December 2004 21,716,000

Seasonally adjusted Payrolls
Total Fed Government January 2001 2,752,000
Total Fed Government December 2004 2,706,000

[finnigan2]

Unfortunately, any statistical comparisons based on "payrolls" are now wildly inaccurate. In the past 10 to 20 years, there has been an accelerating shift in employment from traditional payroll based jobs, to self employment. Personally, I have many neighbors who lost or left their traditional jobs in the past decade or so and have gone into business for themselves. The skills they have, especially in the high tech field, have made them more successful than they were before. Month end government stats that don't reflect this new reality can no longer be used to predict what is happening in the underlying economy.

[Moonman62]

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

9/11 for GWB was like WWII for FDR. It forced a reversal of bad economic policy both by Greenspan and GWB.

[Moonman62]

The rules as I remember for deficit spending are that it is NECESSARY: in time of war and time of recession. President Bush has had to deal with both and is still in the middle of a war.

The rule is that deficits are better than tax increases. There is no excuse for a "no veto" spending spree. GWB showed the same reckless behavior when he was governor of Texas, when there was no war.

[KevinDavis]

What bad policy by GWB.. GWB was in office for 9 months when the attacks happened. There was no economic policy from GWB after the attacks.

[Moonman62]

Is the Clinton recession over, yet? His policies killed our economy.

What policies are those? What about the policies of the Republican Congress of the same time?

[Moonman62]

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

GWB is our FDR.

[KevinDavis]

His 93 tax hike!!!. His refusal to lower taxes..

[1LongTimeLurker]

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

Have a look at http://www.bls.gov/opub/mlr/2004/10/art3full.pdf,, chart 1 shows private sector jobs have yet to reach the peak hit in late 2000 while about half a million public sector jobs have been added in the last 3 years.

[philsfan24]

"Seasonally adjusted Payrolls
Total Government January 2001 20,828,000
Total Government December 2004 21,716,000"

this should never happen during a republican administration. government is expanding way too much.

[1LongTimeLurker]

We should be a bit easy on him regarding the deficit spending.

So you are saying that we needed massive increases in education spending coupled with massive increases in medicare spending?

[xzins]

It is interesting that the war requires deficit spending.

My sense is that for some time, with the media opposing them, and the majority of Americans trained to think like welfare recipients, the Republicans have chosen victory over principle in hopes that the re-education of America might occur.

If they don't defeat the Democrats in this ideological war, the thought would go, then they don't get the chance to advance any kind of change.

Better a few pieces of pie than no pie at all.

Those who will only eat if they get the whole pie are doomed to miss dessert.

[1LongTimeLurker]

this should never happen during a republican administration. government is expanding way too much.

Keep in mind that figure reflects all government employment in the country, not just federal. School teachers for example count as government employees in this data.

For 2004 the federal employment was fairly flat though the postal service did shrink. I haven't looked at cumulative numbers over the last 4 years.

[Moonman62]

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.

Yet the Clinton GDP remained largely intact. Perhaps the Federal Reserve's pervasive belief that full employment and economic growth are bad things had more to do with the collapse than anything Clinton did.

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

I don't think the airlines benefited much from higher oil prices caused by somebody's weak dollar policy, And Sarbanes-Oxley has been every bit as harmful as anything Enron did.

[xzins]

What I'm saying is that MOST OF THE TIME in politics winning is more important than principle.

If you lose you get to advance none of your principles, nor do you get the chance to re-educate.

If you win based on compromise, at least you get to be a player and make the calls that can bring about change.

[RipSawyer]

"The rules as I remember for deficit spending are that it is NECESSARY: in time of war and time of recession."

Actually, it seems to be NECESSARY at all times now. It is hard to balance a budget when congress insists on funding huge programs not authorized by the constitution.

[xzins]

Full employment IS a chimera...

Real economic growth is a good thing; on their good days the Reserve should react to pseudo-growth caused by an inflated economy.

[Destro]

We are still in the black in terms of number of jobs based on 2000 figures - but slowly climbing out of the hole.