Labor Dept. figures show unemployment at 7.7 percent, a 4-year low
The economy added 146,000 jobs in November, and the unemployment rate fell to 7.7 percent, the lowest since December 2008, the government said on Friday.
Experts cautioned that the positive headline numbers from the Labor Department disguise some troubling details.
“Superficially, it looks good,” said Gus Faucher, senior economist for PNC Bank. “The details are worrisome, particularly the decline in the unemployment rate.”
The economy may have created 146,000 jobs last month, but the government revised numbers in October and September, leading to 49,000 fewer jobs than initially estimated.
And a decline in workforce size caused the decline in the unemployment rate to 7.7 percent, from 7.9 percent in October. About 350,000 people stopped looking for work in November and were not counted as unemployed.
“Last month's hope that a better labor market was drawing more people into searching for jobs has been dashed,” said Nigel Gault, chief U.S. economist for IHS Global Insight.
The government said Superstorm Sandy minimally affected the jobs figures.
Since July, the economy added an average of 158,000 jobs a month. That's a modest pickup from 146,000 average in the first six months of the year.
The job growth suggests that most employers have not delayed hiring because of the fiscal cliff — the combination of sharp tax increases and spending cuts set to take effect next year unless the White House and Congress reach a budget deal before then.
Alan B. Krueger, chairman of President Obama's Council of Economic Advisers, acknowledged that leaders need to do more to improve the nation's employment situation.
Krueger said the November numbers are “further evidence that the economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression. It is critical that we continue the policies that are building an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007.”
Though uncertainty over federal taxes and spending may not have affected businesses last month, it may be weighing on consumers.
The Thomson Reuters/University of Michigan Consumer Sentiment survey released on Friday dropped to its lowest point in a year, signaling that consumers worry about the economy.
“Slowly but surely, consumers are starting to become more aware of the so-called fiscal cliff and its implications,” said Leslie Levesque, a senior economist at IHS Global Insight.
Norman Robertson, economic adviser for Smithfield Trust Co., called the economic recovery “disappointingly slow,” despite increases in jobs and a declining unemployment rate.
There are twice as many long-term unemployed today than before the 2008 financial collapse and recession, Robertson said.
“That is a worrying figure,” he said, because the longer people go without jobs, the less likely they are to find stable employment.
“The increase in jobs is obviously welcome news, but we are certainly not out of the woods,” Robertson said.
Despite disappointment with many details in the report, PNC's Faucher said the fact that retailers added 53,000 positions is a positive.
“It's an indication that retailers think that consumers will continue to spend this holiday season,” he said.
IHS' Gault suggested that if political leaders quickly negotiate a solution to the budget, minimal damage might occur to the economy.
“If we can successfully negotiate the cliff without a prolonged crisis and without too much fiscal tightening upfront, employment growth should accelerate in 2013,” Gault said.
The Associated Press contributedto this report. Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928or email@example.com.