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Hiring accelerated in November, and the unemployment rate unexpectedly plummeted to its lowest rate in nearly three years.
Employers added 120,000 jobs in November, the Labor Department reported Friday, marking a pick-up in hiring from October.
Meanwhile, the unemployment rate fell to 8.6%, the lowest rate since March 2009 and a significant decline from 9% just a month before.
Sounds great, right? Well not so fast there Bunky (from the NY Times):
Still, serious concerns remain about the economy’s ability to weather a potential meltdown in Europe.
American governments at all levels continued to bleed workers, for one. And the decline in the unemployment rate had a down side: It fell partly because more workers got jobs, but also because about 315,000 workers dropped out of the labor force. That left the share of Americans actively participating in the work force at a historically depressed 64 percent, down from 64.2 percent in October.
Even excluding these hundreds of thousands of dropouts, the country still had a backlog of more than 13 million unemployed workers, whose spells of unemployment averaged an all-time high of 40.9 weeks.
Think about that for a moment. There were 120K new jobs for November while 315K left the workforce because they had given up on finding a job. It takes nearly 100K new jobs each month just to maintain the status quo. 120K new jobs for the month, while positive, is still a pittance of what is needed. And more than 2 1/2 times the numbers of folks who got jobs left the workforce discouraged. [cont’d.]
MSNBC notes that even the “good news” needs to be tempered as:
The average number of hours worked remained flat in November, while wages fell by 0.1 percent.
More than half the new jobs November were added by retailers, restaurants and bars. Retailers added 50,000 jobs, the sector’s biggest gain since April. Restaurants and bars hired 33,000 new workers. The health care industry added 17,000.
“The quality of jobs is not as great as you would like to see,” said Mark Vitner, a senior economist at Wells Fargo Securities. “A lot of the jobs were probably part-time positions and that is one of the reasons average hourly earnings fell.”
Besides the fall in the official unemployment rate from 9% to 8.6%, the U6 number as reported has also fallen for November from October’s 16.2 to November’s 15.6. I’m not at all sure how this can be unless the U6 has been undercounting folks (which is my supposition). Without having been undercounting people for both the U3 (official unemployment number) and U6 (un and underemployment along with ‘marginally attached’ i.e., those who have given up looking), it just does not seem like both U3 and U6 could fall for November when so many have left the workforce.
Wednesday (November 30), the LA Times had this opinion piece that seems to have a clearer perspective than the official number.
Yesterday’s weekly Initial Unemployment Claims report was back above 400K.