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You are Here: Home > Blog > Unemployment Rate – December 2013

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Employee Rights and Related Matters

Unemployment Rate – December 2013

Saturday, January 11th, 2014

The U.S. unemployment rate dropped to 6.7 percent in December 2013, despite that the economy gained far fewer jobs than economists had expected.

According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the unemployment rate dropped 0.3 percentage points to 6.7 percent in December. The private sector gained 87,000 jobs while local, state, and federal governments lost 13,000. Subsequently, the economy netted 74,000 nonfarm jobs in total.

Analysts had expected 198,000 net job gains in December, according to CNN, but unusually cold weather put a big dent in that number. The unemployment rate dropped to it’s lowest level since October 2008, when it was 6.5 percent and beginning to skyrocket toward the recessionary high of 10.0.

The BLS also revised its job numbers for October and November, showing that the economy gained more jobs than previously reported. October remained at 200,000 job gains after the revision, but November gained 38,000 for a total of 241,000 in the month.

The private sector has now gained nonfarm jobs for 46 consecutive months, with total nonfarm employment (private sector, plus or minus government) showing net job gains in each of the last 39 of those months. The U.S. economy netted an average of 182,000 nonfarm jobs per month in 2013, about the same as in 2012 when the economy averaged 183,000 per month.

At 55,000, the most notable December net job gains were in the retail trade industry (likely because of temporary holiday hiring). Within the industry, food and beverage stores, clothing and accessories stores, general merchandise stores, and motor vehicle and parts dealers all netted positive job gains. The industry as a whole gained an average of 32,000 jobs per month in 2013.

Next in line was the professional and business services industry, with 19,000 job gains. Temporary help services (“temp workers”) added 40,000 jobs (also likely because of temporary holiday hiring), but accounting and bookkeeping services lost 25,000. The industry gained an average of 53,000 per month in 2013.

The construction industry lost 16,000 jobs in December, after gaining 17,000 in November. Job losses were likely at least partly due to the extremely cold weather. The industry gained an average of 10,000 jobs per month in 2013.

Manufacturing netted 9,000 job gains. The industry added a total of only 77,000 jobs in 2013 and has been hurting since the Great Recession.

For the first time since this writer can remember, the health care industry lost jobs. Job losses in December totaled 6,000. The industry was among the few that actually gained jobs throughout the Great Recession. The industry averaged 17,000 job gains per month in 2013 and 27,000 in 2012.

Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (20.2 percent) followed by blacks (11.9), Hispanics (8.3), adult men (6.3), adult women (6.0), whites (5.9) and Asians (4.1, not seasonally adjusted). All groups experienced slight declines in their unemployment rates in December except for Asians, who saw a significant 1.2 percentage point decline.

Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 3.3 percent unemployment rate in December, down slightly from 3.4 in November. Those in the same age group and who don’t have high school diplomas suffered a 9.8 percent rate, down significantly from 10.8 in November. The significant drop in their rate was likely due to temporary holiday hiring.

Unemployment Rate 2008 to 2013
Unemployment Rate Chart 2008 to 2013

The 0.3 percentage point drop in the December unemployment rate was at least partly because fewer unemployed workers were looking for jobs, probably due to the upcoming Christmas holiday. For the BLS to count workers as unemployed, they must be actively seeking jobs in the four weeks preceding the count. Unemployed persons declined by 490,000 in December.

Did you know?Prior to the most recent recession, economists considered the “normal” U.S. unemployment rate to be around 5 percent or between 4 and 6 percent.

The BLS counted 10.4 million workers as unemployed in December, down from 10.9 million in November. That count and the unemployment rate do not include workers who are involuntarily working only part time and with fewer benefits, if any, such as no health insurance, because they can’t find full-time jobs or employers cut their work hours. The number of involuntarily part-timers was 7.8 million in December, virtually unchanged form November.

The average workweek for both part-timers and full-timers was 34.4 hours, down slightly from 34.5 hours in November. Average hourly earnings rose by 2 cents to $24.17. Average hourly earnings rose by 42 cents (1.8 percent) in 2013.

The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work in the four weeks preceding the count, for reasons such as school attendance, family matters or their collective perception that there are no jobs.

The number of marginally-attached workers in December was 2.4 million, up from 2.1 million in November. Among the marginally-attached, 917,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs — at least not for them. The number of discouraged workers was up from the 762,000 that the BLS initially reported in November. (The BLS does not seasonally adjust any of the numeric figures in this paragraph.)

The number of long-term unemployed workers, those who have been unemployed for 27 weeks or longer, was 3.9 million in December, down from 4.1 in November. These workers accounted for 37.7 percent of the unemployed. Standard state unemployment benefits last only up to 26 weeks without extensions.

Did you know?Congress failed to act on further extending unemployment benefit extensions into 2014 before going on holiday recess. As a result, roughly 1.8 million long-term unemployed workers lost their extended unemployment benefits on December 28. See the blog “Unemployment Benefit Extensions 2013 – Updated for 2014” for updates on the 2014 extensions.

If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA. To look for a new job, start at the Job Search page.

For more details about the December 2013 unemployment rate and related matters, see the “Employment Situation Summary” by the BLS. The BLS plans to report the January 2014 unemployment rate on February 7. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.

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Certain figures in this unemployment rate report were rounded and/or seasonally adjusted by the BLS, and are subject to revision by same (based on additional data that was not initially available). The unemployment rate chart pictured above was provided by the BLS.

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