This morning’s December employment situation report showed certain signs of improvement that do indicate a positive trend. However, the fourth quarter of 2009 ended down, consistent with our forecast.

The November jobs number was revised to show a month-on-month gain of jobs. The December jobs number was down 0.8 percent from November and down three percent from the previous year. The unemployment rate held steady at ten percent, which means that the labor force is still declining, or in other words, some people who had been out of work and looking for a job have stopped looking.  Long-term unemployed persons, those who have been out of work for more than 27 months, grew from 5.8 million people in November to 5.9 million people in December.

Our read of the data going forward: we are still in a recession. However, the decline is subsiding. Using the monthly year-on-year non-farm job changes, which are the most stable indicator of jobs, we see that there have been consistent improvements for four months now. See the various job-measure charts below.