Earlier this month employment growth for December was announced at 155,000 new jobs. This was a good but not great showing for the job market, which largely sums up the economy for 2012. The question is, what kind of year does that set up for 2013?
The U.S. economy continued to grow throughout last year, but not strongly enough to give any lift to CD, savings and money market rates. December's job growth was a good example. The Bureau of Labor Statistics announced that 155,000 new jobs were created in December. This was about in line with November's job growth of 161,000, a number that benefited from an upward revision of 15,000 in the latest report.
This level of job growth indicates that the economy is not slipping into a recession, but has not yet generated enough momentum to make a serious dent in unemployment and drive interest rates upward. What's left now is to look ahead rather than backward.
Growth and the fiscal cliff
Perhaps the most encouraging thing about December's employment growth is that it took place in the shadow of the fiscal cliff. Uncertainty is bad for business conditions, and it would have been natural for employers to put off hiring plans until the fiscal crisis was resolved.If the economy managed 155,000 new jobs despite that huge uncertainty, it creates hope for what kind of job growth will come in January, after at least one major aspect of the fiscal cliff -- the tax question -- had been resolved. The stock market certainly reacted favorably in the immediate aftermath of the tax deal. The question now is whether employers will show similar optimism in their hiring plans.