The unemployment rate fell two-tenths of a percentage point to 8.5 percent, the lowest level since February 2009, the U.S. Bureau of Labor Statistics reported Friday, as employers added 200,000 jobs.
The job gains mostly occurred in the transportation and warehousing, retail, manufacturing, health care and mining industries. Both the number of unemployed persons (13.1 million) and the unemployment rate (8.5 percent) continued to trend down in December. The unemployment rate has declined by 0.6 percentage point since August.
Employment in the private sector rose by 212,000 in December and by 1.9 million over the year. Government employment changed little over the month but fell by 280,000 over the year.
Employment in professional and business services changed little in December for the second month in a row. The industry added 42,000 jobs per month, on average, during the first 10 months of 2011.
Government employment changed little in December but was down by 280,000 over the year. Job losses in 2011 occurred in local government; state government, excluding education; and the U.S. Postal Service.
Employment in transportation and warehousing rose sharply in December as employers added 50,000 jobs. Almost all of the gains occurred in the couriers and messengers industry, where 42,000 jobs were added. Seasonal hiring was particularly strong in December.
Retail trade continued to add jobs in December, with a gain of 28,000 jobs. Employment in the industry has increased by 240,000 over the past 12 months. Over the month, job gains continued in general merchandise stores with 13,000 jobs added and in clothing and clothing accessories stores, where 11,000 jobs were added. Employment in sporting goods, hobby, book, and music stores fell by 10,000.
Sang Kim, a partner in DLA Piper's International Tax group and co-managing partner of DLA Piper's Silicon Valley office, noted that the improving unemployment picture may dampen some of the demand for corporate tax reform, especially for a tax repatriation holiday for foreign income for multinationals. “As the job picture improves, there’s a concern that some of these tax holidays could lose some political momentum because the one thing that everyone can agree on is that we need to create more jobs,” he said. “If a year from now, it’s down to 6 percent, I don’t know how much appetite there will be to provide it. But the ultimate resolution on this will depend on the macroeconomic indicators. The unemployment rate still has a long way to go before it’s down to 5 percent.”
November’s unemployment rate was revised upward from 8.6 to 8.7 percent, and the job gains in December were revised down from 120,000 to 100,000.