- The Washington Times - Friday, January 8, 2010


The unemployment rate held steady at 10 percent last month as businesses laid off another 85,000 workers, the Labor Department reported Friday morning.

While job cuts continued through the end of the second full year of recession, the pace of layoffs slowed considerably as 2009 drew to a close: averaging 70,000 a month after peaking at nearly 10 times that amount at the beginning of the year. Moreover, revisions show that a smattering of job growth occurred in November, when 4,000 employees were added to company payrolls.

It was the clearest sign yet that the long string of job losses totalling nearly 8 million during the recession may be slowly coming to an end.

Job growth has returned in a critical sector: temporary employment, where 47,000 jobs were added in December. A total of 166,000 temp jobs have come open since July.

Economists view the revival of temporary work as a likely sign that permanent jobs will soon be created as well. Employers often put off hiring full-time staff until they are sure the economy is growing again.

“Businesses are reluctant to hire new employees until they are more confident in the economic recovery, instead preferring the work force flexibility offered by staffing firms,” said Richard Wahlquist, president of the American Staffing Association, a temp jobs firm.

“However, because staffing employment is a leading employment indicator, the consistent trend of temporary-help job growth bodes well for overall job growth in the near future,” he said.

The 2.5 percent jump in temporary jobs from November to December was the biggest in 20 years, he said. The temp job gains tracked by the Labor Department correspond to a sizable 23 percent rise since July in a temp job index published by the association, he added.

Health care jobs — a bright spot throughout the recession— also continued to increase in December, posting 22,000 gains.

But the employment growth in those areas was overwhelmed by further big losses of 81,000 jobs in manufacturing and construction. Retail trade, hospitality and government also continued to shed jobs during the month.

For people still holding jobs, conditions were little changed during the month. The workweek and overtime hours held steady, while hourly wages rose by a tepid 2.2 percent from a year earlier.

The lack of jobs prompted more than 660,000 people to drop out of the labor force, helping to keep the unemployment rate from rising during the month.

Harm Bandholz, economist at Unicredit Markets, called the jobs figures “sobering,” and said that progress for the unemployed will continue to be painfully slow this year. Both the average duration of unemployment — at 29.1 weeks — and the number of workers too discouraged to keep looking for jobs — at 929,000 — are at record highs.

The unemployment rate would be much higher at around 10.5 percent if a “staggering” 1.5 million people had not exited the labor force in the last four months, Mr. Bandholz said

As the job market gradually improves this year, many of those workers will be drawn back into the market, causing the unemployment rate to rise to around 10.5 percent before it starts to go down again, he predicted.



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