December turned out to be a promising wrap-up of 2011 — if the trend holds up.
According to the federal government, the United States added 212,000 jobs in the private sector last month. Taking into account the loss of 12,000 government jobs, that left the country with a net improvement of 200,000 jobs.
It also moved the needle down on unemployment to 8.5 percent, a level that hasn’t been seen for nearly three years and a half-percentage point better than this time last year.
The question: Is this an indication that the U.S. economy is kicking into a higher gear or just a blip?
There’s no sure answer, at least not yet. The December number has some inherent suspicion because it came during the holiday shopping season, which is always tricky to accurately calculate because of the seasonal jobs that are added then go away.
Also, the long-term unemployed rate — those who have not been able to obtain work for more than half a year — hasn’t changed. When you look at what many believe is a more realistic view of the American job scene, the underemployment rate that includes those who are unemployed who have given up on finding work and those who are working part-time but want to work full-time, the figure is much higher — 15.2 percent.
On the positive side, the U.S. economy added jobs every month in 2011, something that hadn’t happened in six years. And December marked six consecutive months in which the economy added at least 100,000 jobs, which hadn’t happened in five years. The 1.6 million jobs that were added overall last year brought to more than 2.5 million the jobs created since the start of 2010.
But there’s still a long row to hoe on that front. While experts expect the U.S. to add another 2 million jobs this year, that still won’t come close to getting the country to where it was before the big recession hit in 2007. If the prediction holds true, America will have gained an impressive 4.5 million jobs during the three-year period, though it will still have to add another 4 million-plus after that just to get back to the 2007 level. When the economy shook off 8.5 million jobs during the recession, it lost a whopping 5 million in 2009 alone.
What we have to hope is that events don’t put a crimp in the recovery. There are at least three that could have an adverse impact.
First, the European Union problems are still a concern. On Friday, European leaders worked to stem the financial crisis that has pushed Italy’s borrowing rates to unsustainable levels and has France in danger of losing its AAA credit rating. The 17-nation Eurozone has a worse unemployment rate than the United States at 10.1 percent, and even Germany, the group’s premier economy, is showing signs of stress. If the EU falls into a deep recession, it will drag the U.S. and the rest of the world into it.
Second, Iran’s war games and threats could ratchet up oil prices. While America doesn’t buy oil from the Middle East nation, other U.S. trading partners do. If Iran militarily interrupts Middle East oil distribution, pump prices — already more than $3.25 a gallon in our area — could spike sharply, prompting higher business costs, sparking inflation and throwing cold water on a heating-up economy. Toss in a hurricane or two in the Gulf of Mexico, and it could get downright chilly.
Finally, the White House and control of Congress are up for grabs. Politicians unfortunately tend to put their needs and ambitions, and those of their parties, ahead of the good of the nation, figuring that controlling the U.S. government justifies whatever means they have to utilize to achieve those ends.
The one thing America has going for it is our resiliency. In a world where there are no guarantees, that is a critical asset.