While some analysts had hoped that the nation would regard an up month, December unemployment numbers, released by the Commerce Department on Friday, showed a further 85,000 jobs were lost. The unemployment rate, which is measured by a different survey, remained unchanged at 10%.
The number of initial unemployment claims and layoffs have been falling. The four week average of initial unemployment claims is down to around 450,000.
For job growth to take place, actual hiring needs to exceed the number of layoffs and job losses. So far that hasn`t taken place. A good example is United Parcel Service (UPS). On Friday the shipping company announced improved shipping volumes and profits at the same time it layed off an additional 1,800 management and administrative workers.
Another factor is that people who can`t find a job and stop looking are not longer counted as unemployed. Once the economy picks up enough to make finding a job more realistic, those people will resume looking for work, which will either cause unemployment numbers to rise or at least slow their fall.
Overall, the economy has lost over 8 million jobs since the beginning of the recession. Typically between one and 1.2 million net new workers join the labor per year. So it takes 100,000 new jobs per month just to stay even.
In the calendar year 2009, unemployment benefit payments were $140 billion. In December, the payments were $14.7 billion which is roughly the same amount the Federal government pays in salaries in a month.
Coosa Valley News