A surge in hiring last month pushed America's unemployment rate to its lowest level in nearly three years.
According to the Labor Department, U.S. employers added 200,000 positions to their payrolls in December. The national unemployment rate, meanwhile, declined two points to 8.5 percent... That's its best showing since February of 2009.
The private sector powered all of the job gains as a wide range of industries expanded their payrolls. Both the manufacturing sector and the health care industry added 23,000 jobs. Transportation and warehousing added 50,000 workers and even the beleaguered construction industry added 17,000.
All told, U.S. employers added 1.6 million workers in 2011... That's up 70 percent from 2010 - and would have seemed like nirvana in 2009, when America LOST more than 5 million positions.
Rural America typically lags well behind the broader economy during recoveries. This time, however, things are different. Farmers enjoyed record -- or near record -- commodity prices, land values and net farm income at some point in 2011, but the outlook for 2012 is anything but certain. This week, a key barometer of the main street economy revealed a rough spot...
Finding the connection between the European debt crisis, the dollar and the price of farm commodities may seem like a stretch. But one rural economist is connecting the dots.
Ernie Goss, Creighton University: “We got a little story, we got a Spaniard, an Italian and a Greek go into a British pub and who pays the tab? Well, who pays the tab? The American. In other words, right now, the Federal Reserve has told us we are going to provide liquidity for these nations so there isn’t, I won’t say ‘default’ but to provide any liquidity that’s necessary to keep the dominoes from falling.”
Ernie Goss is an economics professor at Creighton University who surveys business owners in nine Midwestern states that rely heavily on agriculture. His data indicate the European debt crisis will continue to be a significant risk factor for farm states. Goss expects financial promises by the Fed, the International Monetary Fund and the European Central Bank to prop-up EuroZone countries will have a bearish effect agricultural commodity prices.
Ernie Goss, Creighton University: “What I expect it to do is boost the value of the dollar. And what it’s gonna mean is agricultural prices are not gonna be that good for the first half of 2012. Energy commodity prices not that good for the first half of 2012. Which is a problem for North Dakota and Oklahoma in terms of energy but it’s a problem for the rest of the region in terms of agricultural commodity prices. So the real key, one of the risk factors is what’s going on in Europe.”
Goss expects the Midwestern states he surveyed to have slow or even no economic growth over the next six months based on data collected for his Business Conditions Index.
Ernie Goss, Creighton University: “…so what we’re looking at for the first half of 2012 is a slow growing economy. I hear these reports that are getting way ahead of what is actually going on. I hear these somewhat enthusiastic consumer responses and I think the numbers aren’t quite as strong. Certainly our numbers…But we’re looking at slow growth in the first half of 2012.”
While Goss predicts the pace of rural economic growth will slow in the months ahead, he believes the outlook for the country as a whole is positive.
Ernie Goss, Creighton University: “The U.S. economy is apt to grow a bit faster in the first half of 2012. So the gap between the two is gonna close, meaning the Mid-America region, the nine state region, growth is gonna come down a bit and the growth in the U.S. is gonna go up a bit.”
While Goss expects the loss of the 45-cent per gallon ethanol tax credit to have a small impact on rural America, he does see the need for clear and concise U.S. policy.
Ernie Goss, Creighton University: “We need a five year energy plan. And we need a plan that can help solidify and assist some of the alternative energy industries, companies. We’re not seeing that and, again, how can you plan?
We’ve just seen, for example, a two-month extension of the payroll tax cut. Two months! Now how on earth can businesses plan when you give them a two-month horizon? We’ve got to have more sanity coming out of Washington in terms of looking ahead.”