U.S. loses almost no jobs in November
Reporting from Washington and Los Angeles -- After two long years of economic destruction that saw about 8 million American jobs disappear, the national payroll essentially stopped shrinking last month in an unexpected turn that raised hopes a labor market recovery might finally be at hand.
Although most analysts had expected November’s job losses to top 100,000, the Labor Department said Friday that employers shed just 11,000 jobs in November -- the smallest number lost since the recession began in December 2007.
And the nation’s unemployment rate fell to 10% last month, down from 10.2% in October.
Lending credence to the possibility of a turnaround, the Labor Department issued revised job-loss numbers for the previous two months. They showed the actual number of jobs lost was about 40% smaller than previous estimates -- 139,000 for September and 111,000 for October.
The surprisingly good news gave a boost to President Obama as he prepared to announce new efforts to stimulate job growth. And many economists saw the jobs reports as evidence that the deep labor market downturn is at, or very close to, bottom.
At the same time, both Obama and analysts cautioned against reading too much into one month’s data.
The report “is a blow to the real gloom-and-doomers,” said Larry Kantor, head of research at Barclays Capital. But, he added, “I wouldn’t go too overboard.”
For one thing, the drop in the unemployment rate in part reflects shrinkage in the nation’s total labor force. One reason for the shrinkage is believed to be that discouraged people were giving up and not looking for jobs.
That’s likely to change now that the news has turned better. The double-digit unemployment rate -- last seen in the early 1980s -- is almost certain to climb again as more people enter the labor force.
For statistical purposes, the labor force is defined as workers and people looking for work, so if some stop seeking employment, the rate can go down even if the number of jobless people has stayed the same or even grown.
Moreover, just because layoffs have slowed sharply doesn’t mean employers are ready to make substantial hires. The American economy needs to generate at least 100,000 net new jobs a month to keep the unemployment rate level as the population grows and new workers join the labor force. Forecasters don’t see that happening until spring at the earliest.
Still, job losses have been declining since peaking at 741,000 in January.
And for individual workers and their families, a small improvement overall could be transforming.
After getting laid off in mid-September from his troubleshooting job at a motor-control manufacturer, electronics technician Rick Rottman of Williamsport, Md., was a bit demoralized.
“I always pay attention to the job numbers, but when you’re actually out of a job, it’s so personal,” the 45-year-old said.
After applying for about a dozen jobs through the Internet, he landed a full-time position at the tech desk of a credit card service company. Though it pays slightly less, Rottman said he couldn’t be more satisfied.
“I’m pretty excited about it. I think I lucked out,” he said. “Not only was I able to find a job, in the long run, I think it’s going to be a lot better than the job I had.”
Obama, eager to show that his economic policies are taking hold, called it the best jobs report since 2007.
“I’ve got to admit, my chief economist, Christy Romer, she got about four hugs when she handed us the report,” Obama said in Allentown, Pa., where he spent Friday as part of a series of planned visits to towns to highlight his efforts on job creation.
“But I do want to keep this in perspective,” Obama added. “We’ve still got a long way to go. . . . Good trends don’t pay the rent. We’ve got to actually grow jobs and get America back to work as quickly as we can.”
That won’t be easy. There were 15.4 million unemployed workers in November, nearly 6 million of them jobless for six months or longer. An additional 9.2 million are working part time only because their hours were cut or they couldn’t find full-time work.
In a speech Tuesday, Obama will lay out specific ideas he wants to see included in a new congressional effort to create jobs. Obama’s economic team plans to work through the weekend to complete his proposal.
The White House envisions something far smaller than the $787-billion stimulus passed in February, though administration officials would not specify the cost.
“This will be on a smaller scale, obviously, than what we did on the Recovery Act. And it is going to be targeted,” said Romer, who chairs the Council of Economic Advisors.
The White House is collaborating with congressional Democrats, who have been crafting a jobs package meant to fuel the fragile economic recovery.
House aides said Friday that the envisioned package would cost about $70 billion and would be financed with money left over from the Troubled Asset Relief Program, the fund used to bail out financial institutions.
Separately, the House also wants to pass a $110-billion program that would ease the burden of the recession on citizens -- extending unemployment and health insurance benefits, for example.
Ideas that Obama will embrace in Tuesday’s speech include a “cash for clunkers"-style program for energy efficiency. People would get cash incentives to retrofit their homes in ways that conserve energy.
Other proposals on the president’s list include tax credits for employers who create jobs, and additional money for road, bridge and port construction.
Though the economy is improving, the White House said unemployment is severe enough to justify new spending measures.
All that may be needed.
Many employers remain reluctant to add workers, according to private-sector surveys and interviews with economists and business owners. Holding them back are weak sales, increased productivity, tight credit and uncertainties about the economy and future regulations.
Of particular concern are the nation’s manufacturing and construction industries, which together eliminated 68,000 jobs last month. Those sectors have shed nearly 3.7 million employees from their payrolls during the recession, but the rate of loss is slowing.
Meanwhile, there were significant job gains in business and professional services as well as in health and education. And payrolls appear to be stabilizing in retail trade, transportation, financial services and the leisure industry.
The temporary-help sector, considered a harbinger of broader hiring, added a net 52,000 jobs in November, the fourth straight month of increases.
Many economists, including Federal Reserve Chairman Ben S. Bernanke, consider the weak job market the biggest challenge facing the American economy. Although economic output has begun growing again, the high unemployment rate and lack of job growth are threatening the broader recovery by sapping incomes and the confidence of consumers.
“We’re a consumer-based economy, and the consumer is not confident,” said Tom Benson, owner of Bud’s Beach Cities, a car upholstery and sunroof shop in Signal Hill.
Benson said he had thought about hiring one or two workers in October but held off because of unstable sales. Now, he says, he’s getting more from his existing four employees and will wait for clearer signals from consumers.
“I’m using temporary labor as new jobs arise,” Benson said.
Other employers said they were at a point where they could hire but were waiting for a clearer indication of the direction of the economy and the various government policies that are under consideration, including policies on healthcare and climate control.
“I’ve seen a lot more activity,” said Kirk Meurer, owner of Modular Systems Technicians, a Cleveland company that sets up and services workstations and business offices. “But for the final decision to pull the trigger, [my customers are] waiting to see what happens in Washington.”