Employers hired workers in 2004 at the fastest pace in five years, with overall payrolls rising by 2.2 million. December's job growth was a bit lower than expected, with the unemployment...
WASHINGTON — Employers hired workers in 2004 at the fastest pace in five years, with overall payrolls rising by 2.2 million. December’s job growth was a bit lower than expected, with the unemployment rate holding at 5.4 percent.
President Bush called the numbers “very positive,” but economists weren’t quite so enthusiastic. One said the year went out “like a cow: beefy but docile.”
The Labor Department reported yesterday that employers expanded their payrolls by a net 157,000 in December, bringing the year’s increase to the highest level since 1999. That year, 3.2 million jobs were created, based on a government survey of businesses. In 2003, there was a net reduction of 61,000 payroll jobs, the department said.
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For the year 2004, the average unemployment rate was 5.5 percent. That was the lowest since 2001, when the average annual rate was 4.7 percent.
The report didn’t wow economists, but it didn’t sour them either.
“2004 didn’t go out like a lion, but it didn’t go out like a lamb,” said Ken Mayland, president of ClearView Economics. “It went out like a cow: beefy but docile.” He added: “These aren’t great results, but they’re not tepid either. They’re kind of in between.”
“With the new year upon us, it’s a good time to reflect on whether the economic news Wall Street salutes is equally good news for working families,” said AFL-CIO President John Sweeney.
“Viewed through the prism of jobs — the measure Americans care about most, the economy remains unbalanced and unsettled, giving working families plenty of reason to worry about what may lie ahead,” Sweeney said.
But with yesterday’s report, Bush is close to closing the gap in job creation that has plagued him for some time. There are now just 122,000 fewer jobs than when he took office in January 2001.
Looking ahead, the Bush administration predicts the economy will create another 2.1 million jobs in 2005 — a figure that private economists say is respectable and beatable. In the game of managing expectations, it’s a much lower estimate than a previous Bush administration forecast of 3.6 million new jobs this year.
“Job growth remains positive, but still stubbornly sluggish,” said Bill Cheney, chief economist at John Hancock Financial Services, calling the jobs market “decent, but uninspiring.”
In the report, last month’s 157,000 net increase in jobs in December was close to the 175,000 that economists were predicting, but barely enough to keep up with population growth. It came on top of the 137,000 net jobs added the previous month, which was revised 25,000 higher than the government initially reported.
The service sector continued to spark overall hiring last month, without help from retailers. The job growth was concentrated in the health-care industry, which added a net 36,000 positions, and business and professional services, which hired a net 41,000 workers.
As the holiday shopping season got in full swing, retailers ended up shedding almost 20,000 jobs overall. Analysts note that the figures are seasonally adjusted and subject to big fluctuations during that time of the year.
“Because of retailers’ trepidations about this holiday selling season, they didn’t do the usual amount of seasonal hiring,” said Mayland, of ClearView Economics.
The good news is the seasonal layoffs that occur this month and next should be moderate, he said.
The housing market last year continued to trigger job growth. The financial-services industry added a net 14,000 jobs last month and 140,000 net jobs for the year as mortgage interest rates remained low. Real-estate employment was flat in December, but up 42,000 over the year.
Construction companies continued to hire new workers for the 10th straight month, increasing their payrolls by 13,000. But the hiring has slowed recently.
Government employment rose 29,000 last month, and 172,000 for the year. Most of the growth occurred at the state and local levels, especially in education. At the federal level, the U.S. Postal Service continued to shed jobs.
The number of people working more than one job in 2004 increased by 574,000 to 7.8 million.
People working part time for economic reasons, including those who wanted full-time jobs but could not find them, was virtually unchanged last month at 4.5 million. But the figure was down about 308,000 for the year.
Economists think the Federal Reserve will continue measured interest-rate increases designed to blunt the risk of inflation. The jobs market hasn’t improved enough to warrant more aggressive increases, they say. The Fed is scheduled to meet Feb. 1-2.