Election-Year Closing: 7.8% Jobless

Photograph by Ty Wright/Bloomberg

An employee grinds down the metal on an oil tank in Bremen, Ohio.

The election year closed with a jobless rate under 8 percent, a four-year low.

The dip below 8 percent just before President Barack Obama’s re-election helped fulfill the White House’s narrative of a reviving economy, albeit a slow recovery. The December rate of 7.8 percent joblessness reported by the Department of Labor today matches the upwardly revised number (notched up from 7.7 percent to 7.8 percent in today’s report.

The economy added 155,000 jobs in December, the Labor Department reports.

These year-end figures also will figure in the narrative that Obama frames in his inaugural address outside the Capitol on Jan. 21: That of a steadily growing yet still vulnerable economy in need of stimulus rather than counter-productive budget-cutting.

The president, who won an extension of the Bush-era tax cuts for 99 percent of American households this week, while raising income taxes on the highest earners, will continue to press for a “balanced” approach to taming a growing federal debt. That will mean tax reform as well as spending restraint.

Employers added workers in December at about the same pace as the prior month, and the unemployment rate matched a four-year low, showing sustained gains in the U.S. labor market even as lawmakers were struggling to reach a budget deal.

The payroll gain of 155,000 last month follows a revised 161,000 advance in November that was more than initially estimated.

And the unemployment rate matched a four-year low, as Bloomberg’s Shobhana Chandra writes, “showing sustained gains in the U.S. labor market even as lawmakers were struggling to reach a budget deal. ”

“Improved hiring, hours worked and wages are helping underpin spending at retailers from Macy’s Inc. (M) to Gap Inc., where December sales beat analysts’ estimates,” she write. “Even bigger advances in employment may depend on lawmakers reaching an agreement on a deficit-reduction plan after Congress this week averted income-tax increases on about 99 percent of households.”

“The labor market continues to recover,” Brian Jones, a senior U.S. economist at Societe Generale in New York, said before the report. “The pace of hiring is respectable, and the unemployment rate will gradually keep coming down. With the fiscal cliff having been averted, this should be good for job growth. The labor market will continue to make progress this year.”

See the full Bloomberg report on employment  today.

 

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