Posted Friday, Jan. 6, 2012, at 8:52 AM
Today's new numbers from the Bureau of Labor Statistics are certainly consistent with my accelerating recovery thesis, showing that 212,000 new private sector jobs were added in December only slightly offset by 12,000 government layoffs. The unemployment rate fell further to 8.5 percent, which this time was unambiguously driven by an increase in employment rather than by labor force dropouts. The broad U6 rate is very high at 15.2% but that's a full percentage point lower than where it was a year ago.
This time around there was no real news in the revisions, with offsetting small tweaks to November and October.
One key issue going forward is whether the state and local layoffs will cease. This 200,000 number is good by the standards of post-2007 America, but hardly a torrid boom. If instead of subtracting 12,000 government workers from the 212,000 private ones we'd added a few thousand to keep up with population growth, then the headline number would look a lot better. And the income of government workers is the purchasing power for private goods and services while sales of private goods and services are the revenue base for public sector employment. To have a recovery that's really "catching," I think we want to see that mutually re-enforcing cycle at work where growth leads to revenues leads to jobs leads to sales leads to growth.
Overall in 2011 we added 1.92 million private sector jobs and laid off 280,000 government workers. In percentage terms, the mining sector is booming and enjoyed approximately 13 percent employment growth. But mining is still a small portion of the American economy and in raw terms health care leads the way. Another sector that did extremely well was Other Information Services which includes "publishing and/or broadcasting content exclusively on the Internet"—i.e., my job—where we went from 145,700 workers a year ago to 165,300 today. I'd like to think that reflects the Ezra Klein hiring spree, but I suspect that everyone who works for Google counts as OIS ("operating Web sites that use search engines to allow for searching information on the Internet") and that they're the actual drivers here.