Series: jobs
Brookings on Job Numbers

Report on the December 2009 Job Situation

Gary Burtless

The latest employment report shows that the nation’s job market continues to make a painfully slow recovery from the worst labor market downturn since the Great Depression. The unemployment rate remained unchanged, though only because the number of Americans withdrawing from the labor force was somewhat larger than the additional number reporting they were without work.

Both the labor force participation rate and the employment-population ratio reached low points we have not seen since the mid-1980s. Although the number of newly laid off workers was considerably smaller than the numbers we saw earlier this year and late last year, unemployed workers face a very grim job search. The average duration of unemployment spells set an all-time record in December. Unemployed workers have now been jobless for more than 6½  months, a record high.

The payroll employment, hours, and wage data reported in the employer survey are a bit more heartening. Payroll employment fell 85,000 in December after remaining essentially flat in November. Service sector employment was essentially unchanged in December after rising in the previous month. This represents a considerable turnaround from the situation earlier in the year when service-sector employment fell every month. Employment in the temporary help industry continues to grow, signaling spot shortages in the number of permanent workers at some firms. Both construction and manufacturing continue to shed jobs, though at a much slower pace than we saw earlier in the year.

The good news is that hours worked in the private sector remained above the level we saw last summer. Hourly wages continue to inch up, although very slowly. One result of a longer workweek is that employees’ average weekly earnings are higher than they were a few months ago. The labor market contraction continues, but workers who currently hold jobs face a shrinking chance of being laid off and may even be seeing a slight improvement in their earnings.