Today’s U.S. Bureau of Labor Statistics report marks a second consecutive month of disappointment. December’s uninspiring employment growth of 103,000 reinforces the strong challenges still facing the U.S. economy. Today’s number, combined with the steady decline in jobless claims, suggests we are only seeing a slowdown in layoffs, not yet a material pickup in hiring. While the labor market enters 2011 with stronger momentum than it had starting 2010, today’s report won’t help the continuing weakness in consumer confidence. Meanwhile, businesses worry about the lack of pricing power, and federal spending cuts may soon join the austerity spread wide across state and local levels. We expect that 2011 will be better than 2010, but that disappointments will abound.

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