Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate declined to 8.5% (the lowest rate in 3 years), continuing a downward trend. The change in total nonfarm payroll employment for October was revised from +100,000 to +112,000, and the change for November was revised from +120,000 to +100,000 (which results in total increase of 192,000 with this report: 200,000 – 8,000 lost in revisions).

The number of long-term unemployed (those jobless for 27 weeks or more) continues to be a big problem and was little changed at 5.6 million, accounted for 42.5% of the unemployed (quite a high percentage). While adding 192,000 is better than losing jobs or adding fewer, it is still not enough to make up for the credit crisis job losses. The economy needs to add 125,000 a month to keep up with population growth. Sustained gains over 230,000 month after month are needed to be what I would see as good, and really above 270,000 would be much better – but given the Eurozone problems, staying about 200,000 may really be good news.

The civilian labor force participation rate (64.0%) and the employment-population ratio (58.5%) were both unchanged over the month.

Over the past 12 months, nonfarm payroll employment has risen by 1.6 million. Employment in the private sector rose by 212,000 in December and by 1.9 million over the year. Government employment changed little over the month but fell by 280,000 over the year.

Employment in transportation and warehousing rose sharply in December (+50,000). Almost all of the gain occurred in the couriers and messengers industry (+42,000); seasonal hiring was particularly strong in December.

Retail trade continued to add jobs in December, with a gain of 28,000. Employment in the industry has increased by 240,000 over the past 12 months.

In December, manufacturing employment expanded by 23,000, following 4 months of little change. Employment increased in December in transportation equipment (+9,000), fabricated metals (+6,000), and machinery (+5,000).

Related: USA Unemployment Rate Rises to 9.8% (Nov 2010) – USA Unemployment Rate Remains at 9.7% (March 2010) – Over 500,000 Jobs Disappeared in November 2008

Mining employment rose by 7,000 over the month. Over the year, mining added 89,000 jobs.

Health care continued to add jobs in December (+23,000); employment in hospitals increased by 10,000. Over the year, health care employment has risen by 315,000.

The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.4 hours in December. The manufacturing workweek increased by 0.1 hour to 40.5 hours. Factory overtime decreased by 0.1 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.7 hours.

In December, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents, or 0.2 percent, to $23.24. Over the past 12 months, average hourly earnings have increased by 2.1 percent. In December, average hourly earnings of private-sector production and nonsupervisory employees were unchanged at $19.54.

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