2010-12-07 06:17:07
Dec 3rd 2010, 15:15 by R.A. | WASHINGTON
ALMOST everywhere you look, the American recovery seems to be picking up pace. The economy grew faster in the third quarter than originally reported. Industrial production continues to grow. Spending has been surprisingly strong, and the latest figures on pending home sales suggest that even housing markets may be stirring from their deep slump. The growth seems to be everywhere except the place it matters most labour markets. Employment in America turned in a surprisingly poor performance in November, indicating that recovery still hasn't gotten the job creation machine turning steadily.
This morning, the Bureau of Labour Statistics reported a disappointing gain of only 39,000 jobs for the month of November. The figure came in well below expectations. In October, the economy grew by an (upwardly revised) 172,000 jobs, and on Wednesday a private employment report estimated that the economy added 93,000 private sector workers. Markets had expected one of the strongest reports of the recovery so far. That's not what they received.
In November, according to the BLS, private employers added just 50,000 new jobs the worst performance since April. From that paltry total were subtracted 11,000 in lost government jobs. Small gains in federal and state government employment were offset by a 14,000 job fall in local government employment. Within the private sector, drops in employment among goods-producing and retail trade firms were offset by new hires among professional and businesses services and in the health and education sectors.
The unemployment rate rose to 9.8% its highest level since April and close to the 10.1% recession peak. At 15.1m, the number of unemployed workers rose back to its April high (though some of this increase was due to new entrants to the labour force). Fully 6.3m people have been out of work for more than 27 weeks. Many of these workers are now cycling off federal emergency unemployment benefits, which expired November 30. Congress has yet to reauthorise the emergency benefits package, as it has done so many times through the recession. Some 2m jobless workers may lose benefits by the end of 2010, and perhaps 4m or more will lose them by April.
There is little to be happy about in this report, in other words. But there are some indications that the November numbers may be an aberration. September's job losses were revised down to 24,000 in this report, while October's job gains were revised upward, from 151,000 to 172,000. Through November, weekly data on initial jobless claims showed significant improvement. And of course, many other indicators have been flashing positive signs in recent weeks.
It's likely, then, that the November figures will be revised up in future months to show a better performance more in keeping with broader trends. And it's important to remember that monthly data are noisy. America's labour markets have yet to generate job growth sufficient to bring down the unemployment rate. But the pace of recovery has been improving. There is good reason to suspect that when all is said and done this report will appear as a blip marring a strengthening upward employment trend. All the same, policymakers in Washington weighing whether to extend unemployment benefits and tax cuts should heed the obvious weakness in labour markets. They can and should make sure that November's number remains an anomaly.
Andover Chick wrote:
Dec 3rd 2010 3:58 GMT
It is conceivable that the bottom 10% of the USA labor force may continue to have employment problems well into the future. The reason is that for the worst workers it is so compelling to replace them with the overseas outsourcing.
For the top American workers one can make a reasonable argument that their sophistication, education and skill makes them irreplaceable by foreign outsourcing. After all the USA has been the brain draining the rest of the globe for decades. But the USA has an awful bottom 10% who doom any business to terrible low quality and high costs. Why employ them when their are so many other alternatives.