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2012 Job Market Brightens, But Unemployment Won’t Fall Fast

USA Today (01/11/12) Davidson, Paul; Hansen, Barbara

The job outlook has brightened the past two months as higher consumer spending, improved business confidence, and a stock market rally have somewhat eased concerns about further shocks from Europe’s financial turmoil. Economists recently surveyed by the Associated Press expect employers to add 2.1 million jobs in 2012, an average of 175,000 a month. While the highest monthly pace in years, it would still fall short of the 250,000 to 300,000 needed to cut unemployment quickly. “It’s not going to be a breakout year,” says Mark Zandi, chief economist of Moody’s Analytics.

Moody’s predicts that three categories—professional and business services, education and health care, and leisure and hospitality—will lead job gains, collectively producing more than 1 million. The energy sector will also continue to hire. Sun Belt states hammered by the recession—Florida, Arizona, Georgia, and Nevada—will rebound some, while Rust Belt manufacturing states such as Illinois, Ohio, and Indiana will generate jobs more slowly.

A survey of 18,000 employers released last month by staffing firm ManpowerGroup found employers’ hiring outlook for the first quarter was at its highest since 2008. At the same time, the level of employers unsure of their hiring plans was the most since 2005. Many large companies, in turn, are holding off on permanent hiring and relying heavily on contractors and temporary workers to complete projects, says Janette Marx, senior vice president of staffing company Adecco.