US Non-Farm Payrolls Show Marginal Improvement

January 5, 2013 in U.S.

Job growth in the US signalled tepid growth with the December Non Farm Payrolls showing an addition of 155,000 non-farm jobs – just a whisker above the consensus estimate of 150,000, and slightly better than the figure of 146,000 reported in November.

The unemployment rate came in flat at 7.8%, the same as that in November (revised).

Sectors which showed notable growth in jobs added were Construction (+30,000), Manufacturing (+25,000) and Education/Health (+65,000). Retail trade (-11,300) and Government (-13,000) were the major losers.

Education/Health accounted for over 40% of the total NFP gains. The private sector employment gain was 168,000.

The influx of new job-seekers into the labour market neutralized the NFP gains and kept the unemployment rate flat.  The implications are that the economy has to do much better than currently in order to meaningfully reduce the unemployment rate.

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