Employers added only 39,000 jobs last month, a sharp decline
from the 172,000 created in October, the Labor Department reported Friday. The
weakness was widespread.
Retailers, factories, construction companies, financial
firms and the government all cut jobs last month.
The weak figures caught economists off guard. They had
predicted the addition of 150,000 jobs, based on a raft of positive reports
that showed busier factories, rising auto sales and a good start to the holiday
shopping season in November. Yet all that failed to translate into mass hiring.
One factor in the weakness of Friday's report was the
difficulty the government had in adjusting for seasonal factors, economists
said. The government's seasonal adjustments took account of the previous two
Novembers in calculating last month's employment numbers. Hiring during the
past two Novembers was highly volatile, which made the task harder than usual.
Joel Naroff, president of Naroff Economic Advisors, said
December's employment figures would probably show a rebound.
"We shouldn't panic," Naroff said. "In any
recovery, it is not smooth sailing." Still, the report was a reminder that
the economic recovery is proceeding more slowly and fitfully than many
economists had expected. It is likely to push lawmakers before year's end to
pass an extension of long-term unemployment benefits, which expired this week.
"November's US employment report is a painful reality
check for those hoping that a meaningful acceleration in economic activity was
under way," said Paul Dales, US economist for Capital Economics. "The
truth is that the economy is going nowhere at a time when companies are not
willing to boost hiring." Private companies — the backbone of the economy
— created only 50,000 jobs. That was down significantly from the 160,000
private-sector jobs created in October and was the smallest gain since January.
With hiring so weak, the unemployment rate rose from 9.6
percent to 9.8 percent. The jobless rate has now topped 9 percent for 19
straight months, the longest stretch on record.
Other reports out Friday offered mixed signals for the
economy:
— The service sector, which employs approximately 80 percent
of the US work force, expanded for the 11th straight month in November and at
the fastest pace in six months. The Institute for Supply Management says that
its service-sector index rose to 55 last month from 54.3 in October. It was the
highest reading since May. Any figure over 50 indicates growth.
— Orders to US factories fell in October by the largest
amount in five months, reflecting a sharp drop in demand for aircraft, the
Commerce Department said. Excluding the transportation equipment, orders were
down a smaller 0.2 percent.
There were 15.1 million people unemployed in November.
Adding those unemployed people to others who are working
part time but would prefer full-time jobs and those who have given up looking
for work, 17 percent of the labor force is "underemployed." That was
the same as October.
Still, the figure remains close to a record high set last
year.
Another grim figure: There was a record 1.3 million
"discouraged" workers in November. Those are persons not currently
looking for work because they believe no jobs are available to them.
Last month, retailers slashed 28,100 jobs. Factories sliced
13,000. Financial firms cut 9,000 and construction companies trimmed 5,000. The
public sector eliminated 11,000 positions, mostly reflecting cuts from local
governments.
Those adding jobs: Health care, with 19,000 new positions,
mostly at hospitals. Temporary-help firms added 40,000 jobs, educational
services companies added 6,200 positions, and leisure and hospitality expanded
payrolls by 11,000.
The economy needs to add at least 120,000 jobs to prevent
the unemployment rate from rising. To reduce the unemployment rate
significantly, monthly job creation has to be a lot stronger — up to 300,000
new jobs a month.
Economists say it could take until near the end of this
decade to drop the unemployment rate to a more normal 6 percent.
Before the lame-duck Congress adjourns later this month,
lawmakers are expected to pass legislation renewing aid to the unemployed.
Extended benefit programs that provide up to 99 weeks of
extra aid to the unemployed expired at the end of November because Congress
failed to extend them. Nearly 2 million stand to lose unemployment benefits as
the holiday arrives.
