Employment was up 120,000 last month and the unemployment rate dropped significantly, to 8.6% in November down from 9% in October. Job growth in October and September was revised up by 72,000.
While the employment story has improved over the past few months, the decline in the November unemployment rate isn't as good as it sounds. People who drop out of the labor force, like those who give up looking for work, are not counted in the jobless rate, and about half of the 0.4 percentage point decline was due to this factor. In fact, about 190,000 of the unemployed left the labor force last month.
Once again, the private sector added jobs -- 140,000 last month -- and the public sector cut them (down 20,000).
The report is consistent with slightly better economic performance over the past few months. It's always useful to average over a few months to work out some of the monthly noise in the data and over the past three months, employment is up by an average of about 140,000 per month, compared to 84,000 over the prior three months.
But there's still a great deal of slack in the job market. Average weekly hours worked didn't budge and hourly wages ticked down slightly -- over the past year, hourly earnings, before inflation, are up 1.8%, well behind inflation.
In other words, we're a long way away from providing job seekers and workers with the job and wage increases they need to get ahead. Outside of the public sector, we're at least moving in the right direction, but very slowly.
Update: Why did the labor force decline? Well, first we should loudly establish the monthly caveat; there's a lot of noise in the monthly data so we shouldn't read too much into any one month.
That said, the labor force 315,000 last month and that explains about half of the large and unexpected decline in the jobless rate. We can get a better feel for the dynamics at play here if we consider the components of the monthly flows behind this drop.
The labor force is the sum of the employed and the unemployed from the BLS Household survey. Last month the labor force count was 153.9 million, the sum of 140.6m employed and 13.3m unemployed.
About 55% of the decline in the labor force last month was people giving up looking for work, meaning they are no longer classified as unemployed by the BLS -- they're out of the labor force. The rest were employed people who went from working to neither working nor looking for a job. Some of those may have gotten laid off and decided not to try to find another job yet. Others may just be retiring or taking some time out of work -- we don't know how those shares distribute.
The figure shows the long term trend of the share of the population in the labor force (aka the labor force participation rate, LFPR -- this is from the invaluable FRED database but it doesn't have the Nov data in it yet, which ticks down from 64.2% to 64%). Note that in the 1990s recovery the LFPR slid in the recession and then grew in the recovery. That didn't happen in the 2000s and it's not happening now.
While some of this is demographics -- boomers aging out of the workforce -- the big story is weak labor demand. Remember, employment was up a measly 4% over the 2000s business cycle and tanked thereafter.
Other bullets from the report:
This post originally appeared at Jared Bernstein's On The Economy blog.
Susan Seitel: A Skills Shortage Or Unrealistic Expectations?
It doesn't. Corporations call the shots, not you.
Chris Hedges: Democracy in America Is a Useful Fiction - Chris Hedges' Clumns - Truthdig
"Corporate forces, long before the Supreme Court’s decision in Citizens United v. Federal Election Commission, carried out a coup d’état in slow motion. The coup is over. We lost. The ruling is one more judicial effort to streamline mechanisms for corporate control. It exposes the myth of a functioning democracy and the triumph of corporate power. But it does not significantly alter the political landscape. The corporate state is firmly cemented in place.
The fiction of democracy remains useful, not only for corporations, but for our bankrupt liberal class. If the fiction is seriously challenged, liberals will be forced to consider actual resistance, which will be neither pleasant nor easy. As long as a democratic facade exists, liberals can engage in an empty moral posturing that requires little sacrifice or commitment. They can be the self-appointed scolds of the Democratic Party, acting as if they are part of the debate and feel vindicated by their cries of protest.
Much of the outrage expressed about the court’s ruling is the outrage of those who prefer this choreographed charade. As long as the charade is played, they do not have to consider how to combat what the political philosopher Sheldon Wolin calls our system of “inverted totalitarianism...”
The President and the Dems should be shouting every time in front of a microphone that the solution to jobs is education and training. And most of these unemployed with out higher education degrees are victims of structural unemplyment and the loss of blue collar jobs that no longer exist in
manufacturing or construction. And they should be pointing their fingers at the Republicans whose only answer for jobs is more tax cuts for the rich and and budget cuts
I don't think college is for everyone, but for those who want to work straight out of high school, their education should prepare them and it doesn't.
Granted, I'm in a high-poverty area of the country, but if high school doesn't even prepare you for *these* jobs, then something is deeply wrong.
If it were a busness, we'd be sayiing, what new product will take off to spur growth, or, what new marklet can we take our products to to grow our market?
I don't know the answers to this. Perhaps it's higher high-skilled immigration.
At any rate, with the opposition to Obama in the Congress (the House majority and a filibustering Senate minority), I don't think I'd lay too much at his feet.
However, the election will probably still hinge on economic growth.
The market looks out six months and with Newt beating Obama in a Rassmussin poll 45 to 43 the early birds are gearing up for when Republicans take control of Washington and the economy takes off.
The unemployment rate is much higher, as you admitted in your article. I'm sick of hearing about single digit unemployment when it's much worse than that. It's propaganda -- trying to persuade citizens to believe that this is not a depression when it is.
Get ready for the deluge: DEBTORS' REVOLT -- DEFAULT EN MASSE. I am an economics and finance professional (retired), a former insider, and I tell you: the predatory lending system is a cancer on the economy. Starve the cancer of its nutrients then, before it's too late.
Spread the meme. Collapse the predatory banking system. Just say no - don't play their rigged game any longer. Repudiate.
And yes, it will cause widespread systemic collapse, but this will be temporary, we will adjust and rebuild, and will have cleansed out the massive DISTORTIONS that currently plague the system.
DEBTORS' REVOLT -- DEFAULT EN MASSE. The momentum grows. The critical mass is near. ...And to the folks who will immediately answer with "pay what you owe. end of story!", let me just preempt by answering that the analysis is more structural and macro in scope than that. It's not just a matter of whose "fault" it is - regardless of that, it's become a macroscale systemic distortion that, if allowed to continue, will prevent any sort of mobility in the long term. We, as a nation, need to simply suck it up, recognize that these contracts were made in what is essentially a different economic era, and recognize that they are incompatible with the new situation. It has to simply be zeroed, reset. Repudiate. Rebuild from there.