Nation's jobless rate falls to 10%
Surprise drop, revisions of prior months' numbers point to economy slowly strengthening
Published: Saturday, December 5, 2009 at 4:03 a.m.
Last Modified: Saturday, December 5, 2009 at 4:03 a.m.
WASHINGTON -- An unexpected dip in the jobless rate to 10 percent led several better-than-expected November employment numbers reported Friday, yet while all bode well for the U.S. economic recovery, significant hurdles remain.
Employers shed 11,000 jobs in November, the Bureau of Labor Statistics reported. That's the lowest level since December 2007, when the recession started and also the last month that the U.S. economy recorded job gains.
The BLS also used more complete data to revise initial October and September job reports to show 159,000 fewer lost jobs combined than first had been reported. The unemployment rate fell in November, from 10.2 percent to 10 percent.
In addition, average hours worked ticked up by two-tenths of a percentage point, showing that workers are getting more hours on the job. A broader measure of employment, which includes people who are working part time when they want full-time jobs and those who have stopped looking for jobs but want to work, also showed significant improvement. This measure of underutilization of the labor force fell from 17.5 percent to 17.2 percent.
It all points to an economy that's slowly gathering steam.
"The initial jobless claims data for the last two weeks had led us to talk about being closer to the point of net job creation than we had previously thought," forecaster RDQ Economics in New York said in a note to investors.
Combine November's fewer job losses with the sharp revisions to the earlier months' numbers "and it is beginning to look like December could be the first month to show a positive payroll print," RDQ said.
Mainstream economists had projected that another 150,000 jobs would be lost in November, so the strong improvement was a pleasant surprise. October's initial report had shown joblessness spiking by a sharp 0.4 percentage point.
"This month's job report was as good as last month's was bad," said Mark Zandi, the chief economist of forecaster Moody's Economy.com in West Chester, Pa. "The reality is probably somewhere in between. That is, the job market is extraordinarily weak and still getting weaker, but moving in the right direction."
Unexpectedly strong hiring in the category of business and professional services, which added 86,000 jobs, powered November's improvement.
"Temporary help services accounted for the majority of the increase, adding 52,000 jobs. Since July, temporary help services employment has risen by 117,000," the BLS report said.
The temp hiring number exhibited the largest jump in five years, analysts said.
The trend is important. Temporary hiring is a harbinger of broader employment, since companies first bring in temp workers to gauge whether economic conditions warrant a return to full-time hiring, which increases their costs for health care and other obligations.
Other positive sectors included health services, which improved by a solid 40,000 positions, and government hiring, which increased by 7,000 positions.
One sobering note: The work force declined by 98,000 in November, and most analysts expect the jobless rate to keep rising in the months ahead. The number of long-term unemployed, those out of work six months or more, rose to 5.9 million.
"The leading indicators in the report -- including more temp jobs, the increase in hours worked and the gain in household employment -- are all pointing to a stable job market by early next year," Zandi said. "However, there are still more job losses to go over the next several months, and unemployment will rise into next summer.
"The labor force continues to contract, which is very unusual, and will ultimately begin to rise as discouraged workers step back in and those with severance and (unemployment) benefits begin to run out of funds and need to resume looking for work."
The challenge ahead is for growth to be strong enough to make a significant dent in the 7.2 million jobs that have been lost since the recession began and the 15.4 million unemployed nationwide. Minutes from the Federal Reserve's November board meeting show that the Fed forecasts that the jobless rate will be somewhere from 9.3 percent to 9.7 percent next December, and 8 percent or higher throughout 2011.
------ NOVEMBER EMPLOYMENT BY SECTOR: --Manufacturing, down 41,000.
--Construction, fell by 27,000.
--Retail, off 15,000.
--Leisure and hospitality, down 11,000.
--Government, up 7,000.
--Health care and education, plus 40,000.
--Professional and business services, plus 86,000.
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