Wikinvest Wire

Payrolls down 11K, jobless rate to 10.0%

Friday, December 04, 2009

The Labor Department reported that U.S. employers cut only 11,000 jobs in November, the smallest decline since the recession began in December of 2007, and the unemployment rate fell modestly from 10.2 percent to 10.0 percent.
IMAGE Job losses for prior months saw substantial positive revisions. The loss of 219,000 positions originally reported for the month of September improved to -139,000 and the October decline of 190,000 jobs was revised to -111,000.

The unemployment rate improved from the 26-year low reported in October and even the broader measure of "underemployment" - including discouraged workers and those settling for part-time work instead of full-time - was better, falling from last month's all-time high of 17.5 percent to 17.2 percent.

The average work week rose from a record low of 33.0 hours to 33.2 hours and average hourly earnings increased, all signs that employers are getting more out of current employees before hiring new ones.

Temporary jobs within the Professional and Business Services category were the driving force behind the better-than-expected headline nonfarm payrolls number, temporary help accounting for 52,400 of the overall increase of 86,000 for this category. And, as usual, the health care and education sectors added jobs, some 40,000 last month.
IMAGE Elsewhere, job losses continued, Manufacturing down 41,000, Trade, Transportation, and Utilities down 34,000, and Construction down 27,000. Within the trade category, retail employment fell by 14,500, not a positive sign for a recovery in consumer spending.

One of the better indicators of the state of mind of your typical American consumer is their willingness to eat out and, hence, changes to employment in the food service sector. Here too, the news was not good as almost 4,000 fewer workers were found in the food services and drinking establishment subcategory.

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fish said...

Isn't this due in part to people falling off the rolls and slipping in to unemployment limbo. That seems to be Shedlocks contention.

Tim said...

fish - I believe these people fall in the "discouraged worker" group that is included in the 17+ percent U6 "under"-employment rate (along with part-time workers seeking full-time work).

Anonymous said...


Some of those formerly unemployed workers will fit the "discouraged worker" description, but not all.

From the BLS: Discouraged workers "want and are available for work, and who have looked for a job sometime in the prior 12 months."

So most of the unemployed that run out of benefits would qualify as discouraged as long as they still want and are available for work.

Others will decide to stay at home with the kids, give up on the idea of working, retire, etc. There are also the trailing effects of those that have been discouraged for 12 months and are dropping off the "marginally attached" rolls.

All of these folks just drop out of the labor force no matter what measure of unemployment you look at (which serves to lower the unemployment rate).

Tim said...

It sounds to me like you can stay on the "discouraged worker" list indefinitely as long as you've looked for work in the last year.

Anonymous said...

Good point.

I was thinking of those workers that only had looked for work to continue to collect their unemployment benefits, giving up the job search once those benefits ran dry.

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