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After a November drop in employment levels due to superstorm Sandy, the payrolls rose again in December. 192,000 people have joined the labor force since last month.
But these improvements are only slightly better than anticipated. The Wall Street Journal reports that economists projected 160,000 more employed people and 7.7 percent unemployment. Unemployment is currently at 7.8 percent.
Government reports state that hiring in manufacturing and construction was a result of superstorm Sandy, creating the December job increases. But retailers saw a drop of over 11,000 jobs during the holiday season. The Washington Post cites this as a sign of how weak the holiday shopping season was.
The Wall Street Journal predicts a decrease in the level of economic growth in the early part of 2013 as take-home pay is set to decrease after the payroll-tax break expires. The payroll-tax break decreased the Social Security tax from 6.2 to 4.2 percent, but was discontinued in the latest round of unsuccessful talks regarding the fiscal cliff.
J.P. Morgan’s chief economist Bruce Kasman warns that future spending cuts by the government could slow down economic growth even more. Kasman also emphasizes the importance of the private sector, which saw noticeable growth. Government contracts during this time contracted by 13,000.
Unfortunately, according to the Washington Post, the hiring pattern of the last few months is not strong enough to reduce the higher-than-normal levels of unemployment. The number of unemployed Americans rose over 150,000 to 12.2 million, even though 192,000 people entered the workforce.
Most of those entering the workforce did not find employment.