November unemployment is a year-end gift for the U.S. labor market
A Bloomberg News survey had forecast a drop of 100,000 jobs in November. The Labor Department revised the October figure to 111,000, down from the previously released 190,000 total, and September's number shrank to 139,000 lost jobs, compared to the initial report of 219,000. During the recession -- which may have ended in July -- the U.S. economy has lost a staggering 7.7 million jobs.
However, this stat comes with qualifiers and conditions, hence investors shouldn't start celebrating just yet. However, there's cause for cautious optimism. That's because the U.S. economy is turning the corner, and if the current trend continues, the country should begin seeing monthly job growth again in 2010, possibly as early as the first quarter.
In other hopeful glimmer, a separate unemployment gauge, which includes workers who can find only part-time work and discouraged workers, fell to 17.2% in November from 17.5% in October.
In November, the lessening of job losses was evident across sectors. Manufacturing lost 41,000 jobs, construction shed 27,000, information industries dropped 17,000, and retail lost 15,000. On the upside, health care added 21,000 positions, and professional/business services added an impressive 86,000.
Further, temporary jobs -- which usually signals a new hiring phase -- increased by 52,000. Since July, the temporary jobs category has grown by 117,000.
Also, total hours worked increased 0.2%, with the average workweek rising to 33.2 hours in November from 33 hours in October. Also, average hourly earnings rose 1 cent to $18.74.
A Given: Adjustments to Data
One qualifier for the jobs report: Even during a normal business cycle (and the post-finanical-crisis business cycle has been anything but normal), the Labor Department's employment total is subject to revision because government statisticians hone the job gain/loss total as they get more information. It's not unusual to see a revision of 40,000 to 60,000 jobs in subsequent months. Those revisions may be larger in coming months, due to the unusual nature of the financial crisis-induced recession.
Further, the end of job losses represents only half the battle. Most economists agree that the more-arduous task -- identifying and creating new sectors of job growth -- remains. Moreover, many new sectors are needed due to the enormity of the structural changes and job flight triggered by globalization.
Here's one example of the scope of that job flight: During restructurings in previous decades, the developed economies of the U.S. and Western Europe lost jobs to lower-cost production centers. That's hardly unusual. But in the globalization era, even still-developing and modest-wage Mexico is losing jobs to lower-cost production centers, such as China and Vietnam.
Help Needed on Multiple Fronts
This puts added pressure on the U.S. to find new areas of job growth -- new businesses to excel in, to lead, to innovate. Most likely, several will be needed because it's highly unlikely that any one new sector -- be it solar energy, biotech, high-end manufacturing, next-generation commercial airplanes, superefficient energy systems, green tech, info tech, health care services, or infrastructure -- will be able to generate enough jobs to replace all of the manufacturing and companion jobs lost to globalization.
Economists generally agree that several of these are necessary for the U.S. remain a strong, versatile and prosperous nation with ample economic opportunities. The sooner those sectors make their presence felt with good-paying jobs, the better.
Although economists like to see three consecutive months of job gains to declare a trend, even with the usual qualifiers, this is very good news -- the best the U.S. economy has received in more than a year. It hardly means economic growth will accelerate. Indeed, a mild U.S. expansion is still expected. But November's data provide further evidence that the economy will start to add jobs soon. That will be a welcome sight for executives, investors and job-seekers alike.