Things didn’t really work out that way. Hiring continued at a decent pace in December.

From the Bureau of Labor Statistics this morning:

Nonfarm payroll employment rose by 155,000 in December, and the unemployment
rate was unchanged at 7.8 percent, the U.S. Bureau of Labor Statistics reported
today. Employment increased in health care, food services and drinking places,
construction, and manufacturing.

The labor force participation rate was unchanged from last month, at 63.6 percent. That’s down from 64.0 percent in December of 2011.

Private payrolls actually increased by 168,000, while the nation lost 13,000 government jobs.

A few things worth noting with these relatively solid numbers:

• Many Americans tune out political news. That includes many employers who make hiring decisions based on the business coming in their door rather than on politics in the nation’s capital.
• Pretty much everyone assumed that a deal would be struck that would limit tax increases on middle class Americans.
• The economy is a huge, weighty entity that has a momentum of its own. Right now, that momentum is positive.

A couple of graphs:

In this post, just a few graphs.

From the BLS:

As I’ve said many times before, we’d all like to see these graphs looking stronger, but there was really no plausible scenario for that to happen given the dynamics of the financial crisis, the housing bust, and the collapse in new construction. More stimulus efforts from governments at all levels would have helped, for sure, but any serious effort was politically impossible.

From Calculated Risk:

Note that the unemployment rate decline looks far more rapid in the long sweep of this graph:

And here’s how much worse the 2007-2009 recession was than previous ones, and how far we still have to go:

And that’s a pretty good number — it suggests that our recovery is continuing and it’s higher than the number of jobs that we need to add each month to keep up with population growth.

The unemployment rate went up, however, to 7.9 percent from 7.8 percent the previous month.

I’ll say more about the data later.

On balance, this seems like good news for President Obama, but no one should be making up their mind about whether to vote for Mitt Romney or Barack Obama based on a single month’s jobs report.

The numbers are estimates and could be revised significantly up or down as new data become available.

The headline jobs number comes from an ongoing survey of payroll establishments across the nation.

The unemployment rate comes from a different survey of households. Unlike the establishment survey that attempts to count the number of jobs in the country, the household survey estimates the number of Americans who report that they have work. Some of those people might have more than one job, some might have deeply unsatisfying jobs, some might even be unpaid interns.

The two surveys tell us different things, all of which are important and all of which should be taken with shakers of salt.

And as for all the talk of partisan tinkering with the data: The numbers are gathered and analyzed by career civil servants working closing with state government employees and using methodology that has been in place for decades.

If there’s a conspiracy to alter the data, then that conspiracy will unravel for sure — it would involve too many people at far too many different levels all of whom would have to agree to fabricate numbers to show the same general trends.

Today’s report should be viewed in the broader context of our sluggish recovery. The nation has been adding jobs for about three years, but we’re still far off the peak of employment in 2008. That sluggish recovery seems to have picked up a little steam of late, but there are lots of known and potential headwinds.

The biggest problem our economy faces is the same one we’ve faced for years: the housing slowdown. New residential investment is typically an economic driver out of recession, but that simply couldn’t happen this time around — and the next few years are going to be bad ones in historical terms no matter who gets elected.

The two data points come from different surveys. The jobs data comes from a survey of payroll establishments, while the unemployment rate comes from a survey of households.

The number of people identifying themselves as unemployed (looking for work but unable to find any) fell by 456,000 over the month.

All these numbers, by the way, are adjusted for usual seasonal trends.

From the release, discussing the household survey:

Total employment rose by 873,000 in September, following 3 months of little change. The employment-population ratio increased by 0.4 percentage point to 58.7 percent, after edging down in the prior 2 months. The overall trend in the employment-population ratio for this year has been flat. The civilian labor force rose by 418,000 to 155.1 million in September, while the labor force participation rate was little changed at 63.6 percent.

So the two surveys simply diverged; this wasn’t a case of thousands of Americans giving up looking for work or of going back to school or leaving the labor force for another reason.

The household survey simply showed far more robust job growth.

A few things to keep in mind:

• The household survey has a much broader definition of “job” — and includes all sorts of unpaid work, internships, self-employment, etc.
• It’s also possible that we’re just seeing the two estimates lie at the outer bounds of margins of error — one high and one low.
• Sometimes the payroll survey data simply lags the household survey data, so it’s possible there’s much more robust job growth right now — especially in the small business sector — than has so far been reflected in the payroll estimates.

The two key charts:

So that’s not a disastrous number under normal circumstances, but it looks pretty bad considering the deep hole we still need to climb out of.

From the BLS:

Nonfarm payroll employment rose by 115,000 in April, and the unemployment
rate was little changed at 8.1 percent, the U.S. Bureau of Labor Statistics
reported today. Employment increased in professional and business services,
retail trade, and health care, but declined in transportation and warehousing.

Of course, the economy didn’t really add 115,000 jobs in April — that statistic is a seasonal adjustment taking into account ordinary seasonal changes in employment. And seasonality might be more relevant here than anything else: the strong job gains in the winter months appear to have been boosted by warm weather to a significant degree. That would mean that we’re now seeing lower numbers directly because of the early surge.

And that means that the economy remains very sluggish, something most people don’t need statistics to prove to them.

There’s frankly little that stands out in any of the data. Even though the unemployment rate fell a tiny notch, so too did the laborforce participation rate.

The broader U-6 measure of unemployment (“Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force”) remained unchanged at 14.5%.

A couple of graphs from the BLS:

Nevertheless, this is a disappointing report, since most analysts were expecting something like 200,000 new jobs. We need to add somewhere around 100,000 jobs per month just to keep pace with population growth.

As I have noted often, these two data points can be a little confusing sometimes, since they come from two separate surveys.

A survey of establishments with payrolls determines the jobs estimate. A survey of households — which has a broader definition of the word “job” than the establishment survey — determines the unemployment rate, which is heavily contingent on the rate of workforce participation.

These different methodologies contribute to the fact that the unemployment rate and the jobs numbers don’t always seem to be moving consistently together. That’s the case today, with a disappointing new jobs number but a still-declining unemployment rate.

Among the few bright spots:

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) fell from 8.1 to 7.7 millionover the month. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

The key reason for the decline in the unemployment rate was a slight decline in the seasonally adjusted number of people in the labor force. That could be the result of seasonal factors related to warm weather or to the statistical method.

The civilian noninstitutional population grew by 169,000 in March, but the number of Americans participating in the labor force fell by 164,000.

So the unemployment rate decline is of little significance.

I’ll post something about U-6 unemployment in a few minutes.