WASHINGTON – Employers shed 85,000 jobs in December, more than economists expected, but added 4,000 workers in November, the first monthly nonfarm payrolls increase in 22 months, the Labor Department reported today.
Unemployment rate was unchanged in December at 10.0%. The November nonfarm payrolls figure was revised higher to an increase of 4,000 from a decline of 11,000 reported last month. At the start of the recession in December 2007, the unemployment rate was 5.0%.
Economists polled by Thomson Reuters expected 8,000 nonfarm payroll job cuts and for the unemployment rate to increase to 10.1%, according to the median estimate.
Nonfarm payrolls were downwardly revised for October to 127,000 jobs lost from the 111,000 decline reported last month.
Job losses continued last month in construction, manufacturing and wholesale trade sectors, while temporary help services and health care employers continued to add jobs.
“The major layoffs are over at this point,” Lynn Reaser, chief economist at Point Loma Nazarene University in San Diego and president of the National Association of Business Economists, said before the report. “Companies have cut staff overly aggressively,” she said.
Average hourly earnings increased 0.2% to $18.80 in December. The average work week remained 33.2 hours in December, unchanged from November.
Economists expected average hourly earnings to increase by 0.2% from November and for the average work week to remain at 33.2 hours, according to Thomson Reuters.
Several economists said the strong November employment report contributed to the December run up in Treasury bond yields.
The 10-year Treasury note yield rose 60 basis points from Nov. 30 to 3.83% on Jan 7. The Municipal Market Data 10-year triple-A scale rose 27 basis points from Nov. 30 to yield 3.05% yesterday.
John Lonski, chief economist at Moody’s Capital Markets Group, said before the report that rising Treasury yields are part of a broader recovery. The yield increases are only sustainable if the Treasury market “has correctly anticipated a strengthening of economic fundamentals,” he said.
