U.S. Jobless Rate Drops to 8.6% in November

While the decline in the unemployment rate was the sharpest since December 2010, the Alliance for American Manufacturing cautioned against letting the numbers lull lawmakers into "a false sense of security."

The U.S. unemployment rate dropped to 8.6% in November, its lowest level since March 2009, the Labor Department reported Friday.

It was the sharpest decline since December, and surprised most analysts, who forecast that the jobless rate would be unchanged at 9% for a second straight month.

"Woo-hoo!" said Robert Brusca, chief economist at FAO Economics. "Jobs creation is in train."

"Continuing upward revisions imply that there is more and more growth that the Labor Department is underestimating."

The economy created a net 120,000 jobs -- not as strong as the consensus estimate of 123,000, but 20% higher compared with October's upwardly revised 100,000 reading.

But the net gain was below the average 131,000 of the past 12 months.

The private sector added 140,000 jobs, in line with expectations. The Labor Department noted solid hiring in the massive services sector. Employment in retail trade jumped by 49,800.

'The Underlying Picture Isn't So Rosy'

Not all of the data was cause for a "woo-hoo."

Manufacturing, a key pillar of the U.S. economy, added just 2,000 jobs, while the overall goods-producing sector lost 6,000. The biggest jobs loser was construction, shedding 12,000 positions amid a prolonged housing crisis.

The manufacturing numbers show that jobs growth in manufacturing "is now stalled," said Scott Paul, executive director of the Alliance for American Manufacturing.

"While a drop in the unemployment rate is always welcome news, I remain concerned about the types of jobs that are being created, as well as the jobs that we are still losing," Paul said.

"Employment in manufacturing, which had seen nearly 250,000 jobs added from January 2010 to June of this year, is now stalled. The sector added just 2,000 jobs in November, and manufacturing employment is virtually unchanged since July."

Stronger employment growth in manufacturing is needed to "rebuild the middle class in America," Paul added.

"I hope lawmakers and the administration do not get a false sense of security when they look at the drop in the unemployment rate, because the underlying picture isn't so rosy," Paul said. "That's why investing in infrastructure, piecing together a national manufacturing strategy and focusing our tax, procurement and trade policies on boosting aggregate demand in our nation are so important."

The private-sector gains continued to be offset by a downward shift in government employment.

The public sector shed 20,000 jobs in November, after a drop of 17,000 in October.

The improvement in the unemployment rate was largely due to a steep decrease in the number of people actively seeking work.

However, the number of unemployed people also fell sharply, by 594,000, from October, to 13.3 million. The department said that was the biggest decline since July 1983.

Copyright Agence France-Presse, 2011

Note: Senior editor Josh Cable contributed to this story.


Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish