The national jobless rate fell in November to its lowest rate in four years to a better-than-expected 7.7 percent, down from 7.9 percent in October.
By DIANE STAFFORD
The Kansas City Star
While economists and investors were concerned about business disruptions from Superstorm Sandy and fears about the fiscal cliff, Fridays monthly jobs report did not read like another natural disaster, said Scott Anderson, chief economist at Bank of the West.
But it is also clear that the rate of job growth remains disappointingly slow, he added.
A net employment gain of 146,000 last month, and average job gains of about 150,000 a month over the last two years, arent enough to markedly improve the job market.
At this rate of job growth, it will take us more than 10 years to get back to the pre-recession employment rate, said Heidi Shierholz, economist at the Economic Policy Institute.
A slow economic growth rate expected to dwindle from a 2.7 percent annual rate in the third quarter this year to 1.5 percent in the fourth quarter leaves the U.S. economy vulnerable.
If Congress fails to reach an agreement to stop the double whammy of scheduled tax increases and $600 billion in federal spending cuts, the slow but steady job gains could disappear next year, analysts say.
Neither Republican Speaker of the House John Boehner nor the Democratic White House had promising words Friday about cooperation. Each side blamed the other for failing to bring viable compromises to the table.
And although the monthly report was better than forecast and provided a boost to the Dow Jones industrial average of 81.09 points serious concerns underlie the headline numbers.
• Unemployment fell largely because more than a half-million adults stopped active job searches and thus werent counted as members of the labor force.
It would be better if the jobless rate fell because new jobs were filled.
• The workforce participation rate slipped from 63.8 percent to 63.6 percent of the working-age population.
Thats just a hair above the lowest participation rate, 63.5 percent, recorded in the depth of the recession.
• The long-term jobless those out of work for six months or more continue to account for four out of 10 of the unemployed, or about 5 million people.
All extended federal unemployment benefits are scheduled to vanish at the end of the year, leaving about 2 million long-term recipients without benefits.
And, job analysts agree, the long-term unemployed will continue to have the hardest time returning to the workforce.
• The biggest contributor to the net payroll growth in November was the retail sector, which gained 53,000 jobs.
That kind of seasonal hiring grew, and thats good in one aspect, said Clyde McQueen, who heads Kansas Citys Full Employment Council. But structurally we still have challenges. The construction and manufacturing sides still have taken hits, and those are the high-paying jobs we need to see.
Nationally, job losses in manufacturing included about 18,000 union jobs lost when Hostess Brands shut down its bakeries in bankruptcy.
The U.S. Bureau of Labor Statistics, in its regular revision of earlier data, also said Friday that employers added 49,000 fewer jobs than previously estimated for September and October.
Still, the job gains may have been enough that theyre unlikely to persuade the Fed from changing its stimulus stance, said Chris Williamson, chief economist at Markit.
Federal Reserve policy makers, who will meet next Tuesday and Wednesday for their last meeting of 2012, have been trying to stimulate the economy by keeping interest rates low and buying mortgage-backed securities and long-term Treasury bonds.
William Dudley, president of the Federal Reserve Bank of New York, said last week that the unemployment rate was unacceptably high. But Fed leaders havent indicated a sure path ahead.
On Friday, a separate report said the Thomson Reuters/University of Michigan measure of consumer confidence slumped to a one-year low.
The indicator, in part, suggests just how widely shoppers will open their billfolds in the fourth-quarter holiday shopping season. Retailers count on end-of-the-year sales to push operations into the black for the year.
One positive indicator, according to the monthly jobs report, was that both average hourly and average weekly earnings rose 0.2 percent in November from October.
But hourly and weekly earnings are unlikely to improve substantially until private-sector job creation accelerates from its pace over the past two years, said Steven Wood, chief economist with Insight Economics.
The private sector contributed all of the November job gains, adding 147,000 jobs. The total net change for the month was pulled down by a loss of 1,000 government jobs.
Analysts also noted that underemployment in which workers are forced to take part-time or low-skill jobs beneath their experience level or talent remains a problem. The monthly report said 8.2 million workers were working part-time involuntarily.
And one other thing of note in the aftermath of Fridays report: Now that the presidential election is past, there was scant political fingerpointing in reaction to the numbers. Commentary came mostly from economists, not politicians.
To reach Diane Stafford, call 816-234-4359 or send email to email@example.com.