A help-wanted sign hangs in the window of a clothing boutique in Los Angeles.
(Photo: Damian Dovarganes, AP)
(USA TODAY) It has been a while since you could say this, but today's jobs report looks unsurprising - and that's mostly a good thing.
The economy added 155,000 jobs in December - almost exactly what economists expected, as private companies hired 168,000 workers and governments shed 13,000. The unemployment rate stayed at 7.8%.
All the major employment trends recently look intact. Construction is getting better, manufacturing added 25,000 jobs after a lull in midyear, retail is a little bit soft with a loss of 19,000 in clothing stores and flat employment overall. Eating and drinking establishments added 38,000 jobs and health care added 45,000.
The good news: Things are working almost exactly as people expected.
FOR INVESTORS: News is good, not great
ELSEWHERE: Services sector grows, factory orders flat
Fear of the fiscal cliff didn't freeze hiring - the 155,000 jobs is almost exactly average for the past two years. Lawmakers' agreement this week to let payroll taxes rise back to 2010 levels while keeping nearly all of the Bush tax cuts was almost precisely the compromise economists have predicted all year. More than $1 trillion in spending cuts over the next decade are still scheduled to start in two months, but talks on how to handle those are still to come.
The worry, at least in the short term: Things are working almost exactly as people expected.
Many economists' forecasts for 2013 predict that the first half of the year will be slow, before things perk up in the second half, and nothing in the jobs report changes that.
The payroll tax hike will take more than $120 billion out of consumers' pockets this year, beginning almost immediately, and despite the 0.3% gain in average hourly wages in December, that's going to take a bite out of consumer spending. And the federal spending cuts that are coming - whether or not they are as big as scheduled - are going to mean less work for government contractors and government employees.
The consensus from economists has been that the pickup in construction and fewer layoffs by state and local governments would offset the federal cuts, and let growth accelerate by late this year.
The jobs report leaves that forecast pretty much intact for now - with some worries. The most obvious is that local governments are still shedding workers, 14,000 last month. So that's one part of the recovery thesis that might come into question as the months go by. And the payroll tax hike is a threat to growth in the discretionary-spending categories like restaurants and retail.
Still, the market's muted reaction Friday morning suggests that its reading on the report amounts to steady as she goes. That may mean the conventional expectation for modest growth early in 2013, followed by a pickup later in the year and accelerating by next year, is still the likeliest case.
Tim Mullaney, USA TODAY