An Unexpectedly Chilly Jobs Report for November
A Bloomberg survey had projected a far higher -- 168,000 -- job increase for the month.
The sparse rise in new jobs pushed the overall unemployment rate to 9.8% -- its highest level since April -- from 9.6%. The Bloomberg survey did forecast a higher jobless rate, but to 9.7%. In November, 15.1 million people were classified as unemployed. Another downer: The private sector added just 50,000 jobs in November, versus gains of around 150,000 that analysts were expecting.
The one bright spot: Job totals for October and September were revised higher, resulting in a net gain of 38,000 for those two months. The Labor Departed revised October's total increase to 172,000 jobs, up from the initial estimate of 151,000. September's loss was revised to a smaller 24,000, rather than the preliminary 41,000.
Underemployment Is Stuck at 17%
Overall, however, November's job report was a major disappointment, across nearly the entire spectrum of statistics.
The underemployment rate, which includes both the unemployed and those working part-time who are seeking full-time jobs, remained the same at a staggering 17%. And the number of long-term unemployed -- those out of work for 27 weeks or longer -- increased to 6.3 million.
Average hourly earnings increased a paltry 1 cent to $22.75 per hour. The average workweek for all employees was unchanged at 34.3 hours. A 0.1 hour increase in the workweek adds about 100,000 jobs to the economy.
Most sector totals also came in at the low end of estimates. Temporary services -- considered a leading indicator of permanent hiring -- added 39,5000 jobs; services added 54,000 jobs; health care, 19,000; and mining, 6,000 jobs. On the downside, manufacturing lost 13,000 positions; government, 11,000; retail department stores, 9,000; and home furnishing stores, 5,000.
When Will the Jobs Appear?
November's downbeat report occurred amid a backdrop of data indicating that the U.S. economy is on the cusp of better things, at least from a GDP growth standpoint. Indeed, U.S. GDP expansion for the third quarter was just revised higher, to 2.5% from 2%. The manufacturing rebound, aided by a slightly weaker dollar, shows no signs of ending. And jobless claims have been in a downtrend for about two months. All these suggested that the protracted period of high layoffs was finally coming to an end.
And yet, despite the stronger growth signs -- and better-than-expected retail sales as the holiday shopping started -- substantial job growth has not appeared in a sustained way. One major reason so far for the so-called jobless recovery has been the remarkable story of continuously rising U.S. worker productivity. It rose again in the third quarter by 2.3%, higher than the initial estimate of a 1.9% increase.
Equally impressive, productivity is up a revised 2.6% over the past four quarters, slightly below the torrid 3.5% increase for 2009, but still an impressive rise in per-person per-hour output in the past year.
Higher Productivity's Downside
That increased productivity has helped the bottom lines of companies large and small: During the 2007-2009 recession, businesses were able to maintain output despite layoffs, a pattern that has held up as the recovery started. But that high productivity has a downside -- it has delayed job creation.
However, as the latest jobs report demonstrates, this expansion in the initial decades of globalization is frequently defying norms and expectations. For workers, it's likely to be a recovery that's filled with fits and starts. And surprises, both good and harsh.
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