At first glance, this morning's job report looks good: an increase of 200,000 jobs along with a decline in the unemployment rate to 8.5%. Job growth was widespread (a good sign). According to the BLS, one interesting area for job growth was the courier and messenger industry, which added 42,000 jobs, reflecting the surge in online sales (FedEx and UPS are in the courrier industry). In addition, the data used to estimate the unemployment rate was revised and now shows a steadier decline in the unemployment rate. The unemployment rate has declined from 8.9% to 8.5% over the last 2 months, predominantly due to job growth as opposed to a decline in the labor force. Even if the labor force had remained steady in the last 2 months, the unemployment rate would still have fallen to 8.6%, indicating that most of the decline in recent months was due to increased employment.
On a less positive note, over the last year, labor force participation has declined from 64.3% to 64% over the last 12 months while the employment-population ratio has increased slightly (from 58.3% to 58.5%). Overall, the December report was relatively good. It'll be interesting to see how much of it is sustainable as we enter 2012. Also, if the economy adds 200,000 jobs per month, it will still be 2014 before we make up for the jobs lost during the Great Recession.