Friday, December 7, 2012

Official Unemployment Rate Drops from 7.9% to 7.7% as More People Drop Out of Labor Force

The November unemployment rate was reported as 7.7%, a drop from last month's 7.9%. More people are dropping out of the labor force, thus enabling a 146,000 growth in jobs for the month to result in the actual unemployment rate falling. Statistics at work.

In addition, we should not put too much faith in the accuracy of the monthly numbers for two reasons --- (1) Sandy probably distorted the results and (2) monthly reports are often subject to major later revisions anyway. This report will probably be the subject of such serious revisions.

In any event, what is apparent is the the U.S. economy remains in a slow growth mode. That indicates no new recession but no significant growth ahead anytime soon either.

U.S. creates 146,000 jobs in November has the breaking news story:

"The nation continued to add jobs at a modest pace in November and the unemployment rate fell to the lowest level in four years as the huge U.S. economy appeared to brush off the damage caused by Hurricane Sandy.

The U.S. economy added 146,000 jobs last month, Labor Department said Friday. The unemployment rate also fell to 7.7% from 7.9%, the lowest level since December 2008, but that was because more people dropped out of the labor force and stopped looking for work. . . .

The pace of job creation in November closely matched hiring trends in October and September. The government revised the number of new jobs created in October down to 138,000 from 171,000, while September’s increase was revised down to 132,000 from 148,000.

The biggest increase in hiring in November occurred in retail, professional services and leisure and hospitality.

Retailers beefed up their staffs by 53,000 employees and some 43,000 professional jobs were created. Leisure and hospitality outfits hired 23,000 workers.

Yet the construction trade cut 20,000 jobs as colder weather approached and manufacturing shed 7,000 jobs. Government employment was essentially unchanged.

In November, average hourly wages rose 4 cents to $23.63. Over the past year, hourly wages have climbed 1.7%.

The average hourly workweek, meanwhile, was unchanged at 34.4 hours. The workweek usually rises when the economy gets stronger, but it’s mostly been flat in 2012."

Summing Up

The U.S. economy keeps plodding along.

The jobless report contained no really good news but had nothing bad to report either.

Maybe that's the good news.

Thus, the U.S. economic glass is either half full or half empty, depending on how we choose to look at things.

And it's likely to stay that way for a long time, too.

Thanks. Bob.

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