U.S. Payrolls Rise but Still Disappoint
American employers added 57,000 workers to their payrolls in November, well short of expectations.
The Labor Department said Friday that the net increase in payrolls -- which extended the nation’s run of job gains to four months -- helped trim the unemployment rate a tenth of a point to an eight-month-low of 5.9%.
But the number of people hired was barely one-third what analysts had been predicting. That reignited the debate over President Bush’s handling of the economy and revived worries that a wedge had been driven between economic growth and job growth.
The president sought to look past the details of the job report in an appearance Friday in Maryland, choosing to focus on the generally positive bent of recent trends and to trace the improvement to his tax cuts.
“The unemployment rate dropped.... More workers are going to work.... We’re a strong country, a strong economy,” Bush told workers at a suburban Home Depot.
At least one of Bush’s Democratic challengers would have none of it. “While President Bush is celebrating, someone should remind him that 8.7 million Americans” are unemployed, said Sen. John Edwards (D-N.C.).
Economists did find a silver lining in the November job numbers. New hiring, though modest, was pretty much across the board, suggesting that the economy as a whole was on the mend. The battered manufacturing sector shed only 17,000 jobs, a big improvement over the 100,000-a-month losses of a few years ago.
Analysts blamed part of the weak jobs showing on the California grocery strike and lockout, which trimmed at least 23,000 employees from U.S. payrolls who ordinarily would be working. But even if these workers were added back in, the November gain would be only half the 150,000-plus that most economists had expected.
All in all, the latest report was, in the words of John Hancock Financial Services economist Bill Cheney, “like getting just the Christmas present you wanted, but two sizes too small.”
Next week, Congress is scheduled to return to Washington to take up unfinished spending measures and is likely to come under mounting pressure to renew a soon-to-expire extended unemployment benefits program.
Advocates said the case for renewing the extended benefits was strengthened by the November statistics, which showed that the fraction of the unemployed who had been out of work six months or more hit a 20-year high of 23.7%. The program, originally passed in March 2002 and twice renewed, gives workers who run through their regular six months of benefits another 13 weeks of coverage. Absent congressional action, the program will begin shutting down Dec. 21.
“With long-term unemployment at a 20-year high, President Bush and the Republican Caucus have no excuse whatsoever for refusing to grant unemployment benefits for the long-term unemployed,” said Sen. Edward M. Kennedy (D-Mass.), a long-time advocate of unemployment benefits.
Analysts said the comparatively weak job numbers would have a subtle effect on Federal Reserve policymakers, who meet next week to decide whether to maintain key interest rates at four-decade lows.
As one economic statistic after another came in stronger than expected in recent months, the central bank has been under rising pressure to begin raising interest rates to keep the economy from overheating and rekindling inflation. The economy grew at a two-decade-high 8.2% annual rate last quarter.
But with Friday’s numbers showing that the nation’s labor market has yet to snap back, that pressure is likely to dissipate.
The economy needs to create a net of 125,000 to 150,000 jobs a month to keep pace with a growing population and labor force. It has to create even more jobs to produce steady declines in unemployment.
While the overall unemployment rate slipped in November to 5.9%, the rate for blacks dropped 1.3 percentage points to 10.2%. By contrast, the rate for Latinos climbed two-tenths of a point to 7.4%.
In what some analysts took as a sign of improvement, employers nudged up the average workweek by a tenth of an hour to 33.9 hours and the manufacturing workweek by two-tenths of an hour to 40.8 hours. Firms usually increase the hours of their existing workers before making new hires.
