Another “OK” BLS report; What’s your Prediction for 2013?
The Bureau of Labor Statistics showed the economy added 155,000 jobs in December, in line with expectations (some were looking for 160k)and also in line with the two-year average.
The unemployment rate was unchanged for December at 7.8%.
To add to the mediocrity, this final reading for 2012 shows an unemployment rate over the course of 2012 little changed with just a 0.5% reduction (actually there are more people theoretically unemployed when you factor in the participation rate) due to new seasonal adjustment factors.
The labor force participation rate remained steady at 63.6% in December and the employment-population ratio, at 58.6 percent, was also relatively unchanged month to month.
The number of new jobs created in November was revised up to 161,000 from 146,000, while October's figure was revised down to 137,000 from 138,000.
There was weakness in retail and government jobs in December. This data further supports the thesis that this holiday retail season may not be all that good. Hourly wages rose 7 cents, or 0.3%, to $23.73 while the average workweek edged up by 0.1 hour to 34.5 hours.
All in all it was more of the same, which might be all the markets want to see given the fact that the Fed’s accommodative policy is now directly tied to the U.S. employment rate with a hard target. Last night’s minutes signaled a Fed that acknowledged stubborn, lethargic economic growth and essentially admitted that they are all out of arrows in their quiver.
So I guess slow and steady wins the race, because the market seems to be moving higher. At this rate, I see the U.S. shaving another 0.3% off the unemployment rate at best by the end of 2013 (using their calculations, which I don’t agree with) putting the rate at 7.5%.
That is with the caveat that Washington comes to a quick, balanced agreement on budget cuts, U.S debt doesn’t get downgraded and lawmakers don’t add anymore taxes. :)
What do you think the unemployment rate will be at the end of 2013?