WASHINGTON (Talon News) — The Labor Department announced Friday that U. S. employers added 157,000 workers to their payrolls in December making 2004 the strongest year for job creation since 1999. Figures for October and November were also revised upward, accounting for a total of 2.2 million new jobs created since January. Jobs gains averaged about 190,000 jobs per month during the year.
Even though the unemployment rate held steady at 5.4 percent, that number is below the average of each of the past three decades. At 5.4 percent, the unemployment rate has declined significantly from 6.3 percent in June 2003. Payroll employment has now increased by over 2.6 million jobs since August 2003.
House Budget Chairman Jim Nussle (R-IA) was upbeat about the figures, saying, “It’s good to see steady jobs growth and low unemployment for our economy as we enter the new year.”
The White House was also pleased by the economy’s performance.
Press Secretary Scott McClellan said, “What we are seeing is sustained growth and job creation because of the policies that the President implemented.”
For nearly two years, opponents of President Bush used the jobs deficit to criticize his economic policies, particularly tax cuts. Democrats predicted that Bush would be “the first president to have a net job loss since Herbert Hoover.” Friday’s number pushed the President’s first term job tally beyond the break-even threshold and into positive territory by 114,000.
The Democrats’ rhetoric was forced to evolve as the economy began to gain strength in early 2003. The “jobless recovery” became the “worst economy since the Great Depression” and when it became apparent that Bush would surpass the net zero mark, his opponents complained about the quality of the jobs created. Ultimately, voters sided with the president, rewarding him with a second term and expanding his party’s majorities in both houses of Congress.
The American economy began its slide into recession before Bush took office in January 2001 when the stock market bubble burst. Nearly 500,000 jobs had disappeared by June. The terrorist attacks of September 11 wiped out another one million positions, and the discovery of corporate accounting scandals that had begun in the last 1990s drove the economy further down.
The service sector continued to lead overall hiring in December, focused mainly in health care, which added 36,000 jobs. Business and professional services added another 41,000 more workers. The financial service industry gained 14,000 jobs last month.
Construction companies expanded their payrolls for the 10th straight month, hiring 13,000 employees.
The Bush administration predicts the economy will create another 2.1 million jobs in 2005.
The president’s tax cuts appear to have been the stimulus needed to jump-start the economy. Economists concerned about the deficits created in part by the lowering of tax rates are encouraged by the increased tax revenues pouring into the treasury that have allowed several significant reductions in deficit projections.