Businesses Cautiously Optimistic in Wake of Jobs Report
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With unemployment near its lowest of the past three years and consumer confidence numbers making the biggest one-month jump since 2003, suddenly the jobs picture and the economic outlook seem totally different as 2012 kicks off.
According to the December 2011 jobs report, the unemployment rate fell again in December as 200,000 new jobs were added in the final month of 2011. These additions drove the unemployment rate to 8.5 percent, the lowest number since February 2009. This number marked the fourth straight month in which the unemployment rate has dropped and the sixth straight month in which 100,000-plus jobs were added to the economy.
"The good news is that the number of owners cutting jobs has 'normalized'. In the past several months, reports of those cutting workers have been at the lowest levels since the recession started in December 2007," said William C. Dunkelberg, chief economist for the National Federation of Independent Business (NFIB)."Only time will tell what 2012 will bring. At least it appears that plans to hire are trending in a positive direction."
For the year, 1.9-million private sector jobs were added overall. Significant growth was found in the following industries:
- 50,000 jobs were added in transportation and warehousing, with strong seasonal growth of couriers and additional deliverymen driving that growth.
- 28,000 jobs were added in the retail industry.
- 23,000 jobs were added in the manufacturing industry.
- 17,000 jobs were added in the construction industry.
Despite positive growth in many of the above areas, many business owners seem to be waiting for the other shoe to drop, as they are leery of how the economy will respond after the record-breaking holiday season.
"Unfortunately, December's jobs numbers fizzled, with the net change in employment per firm turning negative again; small businesses lost an average .15 workers per firm," Dunkelberg said. "Seasonally adjusted, 13 percent of the owners added an average of 2.6 workers per firm over the past few months, and 12 percent reduced employment an average of 3.5 workers per firm. However, the majority of owners, 75 percent, made no net change in employment. Forty-five percent of owners hired or tried to hire in the past three months, but 34 percent of them reported few or no qualified applicants for the position."
The recent jobs report delivered good news to the beleaguered manufacturing industry for the first time in years, but challenges from competition overseas looms in the minds of many American manufacturers.
"Finally, we have something to celebrate in manufacturing," said Scott Paul, executive director of the Alliance for American Manufacturing."Adding 23,000 manufacturing jobs in December is welcome news for a sector that has shed one-third of its employment in the last decade. However, many challenges lie ahead."
Paul T. Conway, president of Generation Opportunity a self-described "organization that seeks to engage everyone from young adults, to early career professionals, and college students," stated that despite recent growth, the current economic situation still presents challenges to many people looking to find jobs.
“If our nation's elected leaders want to show true empathy for those without jobs and have a real impact, they will stop pretending they have any expertise with job creation, admit their job-killing policies of over-regulation and increased taxes are the true barriers to youth employment, and step back and let private employers do what they do best. December's 8.5 percent overall jobless rate fails to reflect the significant and ongoing challenges faced by young Americans. Hidden behind the numbers is the fact that many Americans have either accepted short-term, seasonal work or simply given up looking for work and are therefore not factored into the unemployment rate," according to Conway.
Joel Prakken, chairman of Macroeconomic Advisers, however, feels that positive signs are in place that will allow the unemployment rate to continue to fall.
"Other indicators also signal some firming of labor market conditions, including the downward trend in unemployment claims, upturns in consumer sentiment and confidence influenced by perceptions about the availability of jobs, along with a rising trend in employees voluntarily quitting their positions," Prakken said.
Reach BusinessNewsDaily staff writer David Mielach at Dmielach@techmedianetwork.com. Follow him on Twitter @D_M89.