Unemployment rate drops to 9.4%, but December jobs report shows only modest gains

Reporting from Washington — Employers across the country added a modest 103,000 jobs to their payrolls in December, the government said Friday, closing out the year with a bit of a whimper instead of the bang that some economists were expecting.

Analysts were expecting new jobs on the order of 150,000 after recent unemployment filings and private surveys of hiring and layoffs suggested that the anemic labor market was solidly improving.

The Labor Department report, however, showed that the unemployment rate dropped dramatically last month to 9.4%, from 9.8% in November. The drop was likely due at least in part to statistical adjustments, as the government's count of unemployed workers fell by 556,000 to 14.5 million.

The unemployment rate is based on a monthly survey of households and derived by tallying the number of people with jobs and those who say they are unemployed but actively looking for work. At the end of the year, government statisticians make data adjustments using new information.

Analysts generally put much more stock in the government's separate survey of public and private employers, from which payroll jobs data by industries are produced. And this report showed a mediocre finish to a year in which the economy, though technically in recovery, grew jobs at a disappointingly slow pace.

So now the Dems say this:

“The unemployment rate was falling before the Republicans took office-—as PROOF that Pelosi/Reid/Obama ideas were working........”

Now they will blame any slowdown, crash, or rise in unemployment between now and election 2012 on REPUBLICAN ideas and Obama deals with Republicans.....and the SS tax rises next year as well as Fed Funds interest rate......

Republicans SHOULD have listened to people like ME.....bargain for permanent tax cuts .....that were better than Bush’s code.......and make PERMANENT cuts to the SS tax and eliminate the Medicare tax by arguing that survivor’s benefits and disability and Medicare NEVER should come from first dollar payroll taxes in the first place.

Bernanke needs to GO now...the Fed Funds rate needs to be immediately raised to 2% to avoid disaster and the Fed needs to say that it will stay at 2% for at least 18 months.....then......raise it to 4.5% if needed.....all this mess began BECAUSE of the Fed.....

when Greenspan caused the 2001 recession by raising interest rates NOT because inflation was high, but because he believed that great GDP growth and low unemployment cause inflation....the
Fed needs to FORGET it’s bogus idea of 5% being “full employment” and stop interfering with labor markets....

You might have 3% unemployment in one state but 8 percent unemployment in another...so people move from the states with high unemployment to states with lots of jobs...thus filling the labor shortage in one state with the labor surplus from another......

Not only that, but excess supply of labor will come out of the woodwork when the Fed allows labor markets to raise wages naturally and not artificially... by low unemployment.....some companies will fail because they can’t pay a higher wage..and thus will release excess labor....markets will slowdown the economy without the Fed trying to do it unnaturally through the housing and labor markets and causing these horrible booms and busts with stagnating wages against rising prices....it’s the Fed

which makes liberalism attractive by refusing to let the economy grow or fail on its own merits.......

If the economy wants to grow 6% GDP, then the money supply better be growing 6%.........or else it contracts and deflation hits.......

the ONLY way that “supply-side” low tax economics CAN work is if and only IF the Fed abandons the idea of 5% “full employment”.

The way you balance the budget and get surpluses at lower tax rates is ONLY if the economy and money supply grow faster and the unemployment rate is allowed to fall under 5% and stay there for extended periods of time.

If the Fed kills growth by raising interest rates and starving the economy of money it needs to grow just because GDP growth is over 4% and unemployment is under 5%...then tax cuts will always fail to produce the more revenues and budget surpluses they promise......regardless of spending cuts—which never seem to happen, anyway....

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