January 10, 2014

December 2013 Unemployment Report


December 2013

Unemployment Rate:              6.7 percent

Unemployed Americans:        10.4 million


“Real” Unemployment

  • The “real” unemployment or U-6 rate is 13.1 percent for December 2013, unchanged from last month. This is the total percentage of unemployed and underemployed workers.
  • The “real” number of unemployed Americans is 20.6 million. These are people who are unemployed (10.4 million), want work but have stopped searching for a job (2.4 million), or are working part time because they can’t find full time employment (7.8 million).

Labor Force Participation

  • The labor force participation rate is 62.8 percent, a decline of 0.2 percent from last month and tied for the lowest level in 35 years. The civilian labor force fell by 347,000 in December after rising by 659,000 in November. 
  • If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 10.8 percent.
  • The share of American adults with jobs in December was 58.6 percent, unchanged from November. This is more than five percentage points below its pre-recession peak. 
  • The number of long-term unemployed is 37.7 percent of the unemployed -- an increase of 0.4 percent from last month. During the 1980s, when our country faced a similar recessionary period, the proportion of long-term unemployed never exceeded 27 percent. 
  • Concern has also been raised about the consistent number of Americans working part time for economic reasons -- because they are unable to find a full-time position or their hours have been cut back. This figure was near eight million throughout 2013.
  • There were 917,000 people in December categorized as “discouraged workers,” an increase of 155,000 over the previous month. Discouraged workers are not currently looking for work because they believe no jobs are available for them. Media reports have attributed the decline in last month’s unemployment rate to “people leaving the workforce.” 

Discouraged Workers

In thousands

Discouraged Workers

Employment

  • The Department of Labor reported an unemployment rate of 6.7 percent for December 2013, down 0.3 percent from November. It reported an increase of 74,000 nonfarm jobs, sharply lower than in recent months. Today’s job creation figure is lower than economists’ forecast of 200,000 new jobs. The employment figure for October was revised from 203,000 to 241,000 jobs created, with the figure for November remaining at 200,000 new jobs.
  • President Obama promised a “natural unemployment” rate of 5.0 percent by now.
  • Last month’s employment gain is the lowest in three years, since January 2011. The Wall Street Journal has noted that “more than four years into the economic recovery, the job market’s healing process remains far from complete” as the unemployment rate remains near levels previously seen only during recessions. 

Job Growth Is Steady but Insufficient

Change from previous month in thousands

Job Growth Is Steady but Insufficient

  • In December, the Federal Reserve indicated it would lower its monthly purchases from $85 billion to $75 billion. Starting this month, it will purchase $35 billion of mortgage-backed securities per month rather than $40 billion, and $40 billion of longer-term Treasury securities per month rather than $45 billion. The Wall Street Journal also points out that today’s jobs report “could cause the Fed to re-examine its plans to wind down an $85-billion-a-month bond-buying program.” The Board of Governors is scheduled to meet January 28-29. 
  • Employment in December increased in retail trade (+55,000), wholesale trade (+15,000), and professional and business services (+19,000). Employment in information fell by 12,000, construction fell by 16,000, and health care employment fell by 6,000 last month. 

Weeks, Hours and Wages

  • The average hourly private nonfarm payroll rose by two cents to $24.17. Year-over-year hourly earnings have risen 42 cents, or 1.8 percent. 
  • The average work week for private nonfarm employees was 34.4 hours, down 0.1 from November.  

Issue Tags: Labor, Economy