The headline employment numbers for December 2011 from the Employment Development Department were good news across the board.
Industry employment grew 10,700—the fifth consecutive month-over-month gain. November’s gain was revised up to 24,700 (a 18,200-job improvement from originally reported 6,500 gain).
California’s unemployment rate tumbled 0.2 percentage point to 11.1 percent—the lowest rate since April 2009. The unemployment rate has fallen in four consecutive months, decreasing by a full percentage point. In December, the number of Californians employed rose 73,000, unemployment dropped 37,000, and the labor force grew by 37,000.
This makes it look like the economy has shrugged off the midyear slowdown and improves the liklihood that the recovery has become self-sustaining.
There is a definite contrast between the most recent months and the earlier months of 2011 and 2010. In the four months ending with December,
- nonfarm employment rose 112,300 versus gaining only 25,800 in the preceding four months
- the unemployment rate dropped a full percentage point, versus rising 0.3 percentage point in the preceding four months
- the number unemployed dropped 154,000 versus rising by 34,000 in the preceding four months.
Notably absent was (1) contradictory noise in the underlying details and (2) any suspicious results. For instance, the seasonal adjustment process didn’t generate any unreasonable numbers.
Keep in mind, that even though all the numbers are moving in the right direction, they look good mainly in comparison to what we’ve seen over the past several years—adding 10,700 jobs is good news because we only added less than 7,000 jobs per month on average in 2010 and lost 64,800 per month in 2009. Nonfarm employment in December was still 1,015,300 lower than the pre-recession peak in July 2007. An 11.1 percent unemployment rate is still very high.