Unemployment falls to 9.4%
Nonfarm payroll employment rose last month although lower than most analysts expected, and the unemployment level decreased to 9.4%, the lowest since May 2009. The Labor Department's Bureau of Labor Statistics said the economy added 103,000 jobs in December with employment gains in the health care sector, as well as leisure and hospitality industry but little change elsewhere. Analysts surveyed by Briefing.com were expecting an increase of 200,000 jobs for the month. The consensus figure from an Econoday survey called for 160,000 new jobs with a range of estimates between gains of 95,000 and 225,000. Payroll employment averaged gains of 94,000 monthly from December 2009 through last month adding 1.1 million total jobs, according to the Labor Department data. The unemployment rate rose to 9.8% in November. The Labor Department initially reported gains of 39,000 jobs for November but has now revised that to an increase 71,000. Earlier this week, Automatic Data Processing Inc. said private-sector employment rose by a record 297,000 jobs in December. It was the largest monthly gain since ADP began tracking the data in 2000. Although some analysts are leery of the figure, including Macroeconomic Advisers, which put the report together for ADP. "The 103,000 increase in U.S. payroll employment in December is very disappointing after the spectacular 297,000 gain touted by the ADP survey," according to Paul Dales, senior U.S. economist with Capital Economics. "We always thought that looked too good to be true at a time when all the other indicators had improved only modestly." "But December's actual increase still fell well short of our post-ADP forecast of 175,000 and even our pre-ADP forecast of 130,000," Dales said. "What's more, even the eye-catching fall in the unemployment rate from 9.8% to 9.4% may not be sustained. The drop was due to a 297,000 increase in employment on the separate household survey and a 260,000 decrease in the labor force." Write to Jason Philyaw.