Unemployment Drops to 8.5%, 200K New Jobs, But…

|| After 3 years of unemployment struggles, it the US economy finally rebuilding itself? ||

Rebuilding?

It happened again.  After dropping to 8.6% in December (which was later revised to 8.7%), the nation’s unemployment rate ticked down once again.  This time dropping to 8.5%.

A burst of hiring in December pushed the unemployment rate to its lowest level in nearly three years, giving the economy a boost at the end of 2011.

The Labor Department said Friday that employers added a net 200,000 jobs last month and the unemployment rate fell to 8.5 percent, the lowest since February 2009. The rate has dropped for four straight months.

The hiring gains cap a six-month stretch in which the economy generated 100,000 jobs or more in each month. That hasn’t happened since April 2006.

The steady drop is a positive sign for President Barack Obama, who is bound to face voters with the highest unemployment rate of any sitting president since World War II. Unemployment was 7.8 percent when Obama took office in January 2009.

While naysayers will want to argue that the uptick was a seasonal blip caused by the Christmas holiday, only 28,000 (14%) of the 200,000 new jobs created were in the retail industry.  Retail did have an effect on the new hiring, but the 200,000 new jobs created is a very strong number.  150,000 new jobs were predicted for December 2011.

But… just like in November, the US workforce continues to shrink.  There were 50,000 fewer potential employees in December as compared to the previous month.  Decreasing the pool or workers statistically lowers the unemployment rate whether or not any jobs are created.

The unemployment rate would be 10.9% if the US workforce was the same as it was when President Obama took office.

More bad news for President Obama; African American employment.  Unemployment among the nation’s Blacks climbed another 3 tenths to 15.2%, nearly double what it was for Whites (8.3%).  Unemployment is at 16.4% for Black men.

Despite the nation’s improving employment numbers, 13.1 million Americans remain unemployed.

23.7 million people are either out of work or underemployed.