By Steven Mufson
Washington Post Staff Writer
Saturday, December 5, 2009
The U.S. unemployment rate edged down to 10 percent in November from 10.2 percent the month before, offering fresh evidence that the economy is stabilizing and that employers may soon stop shedding workers.
The number of jobless Americans stood at 15.4 million in November, down slightly from October but still more than double the number at the start of the economic slowdown.
The pace of job recovery remains sluggish enough that President Obama next week is likely to endorse a proposal by top House Democrats to use a portion of the government's $700 billion financial bailout fund for a new jobs creation program.
"The president thinks we should and must do everything in our power to create an environment for job growth and job creation," White House press secretary Robert Gibbs told reporters Friday morning. When asked whether Obama will back the use of bailout funds during a speech about the economy next Tuesday, Gibbs said, "It's certainly being looked at. Yes."
About $139 billion of the Troubled Assets Relief Program, or TARP, remains unallocated. In addition, banks have paid interest and dividends and repaid aid worth a total of about $81 billion, according to the Treasury, and Bank of America said it will soon repay another $45 billion. Congress would likely have to pass new legislation allowing TARP money to be spent on job creation.
After months of dismal employment news, the Labor Department report was greeted with relief at the White House, which has been battling to convince voters and business leaders that it is doing everything it can to ease the plight of Americans searching for work. Obama, who Friday launched a Main Street-style tour of cities across the country in the coming weeks, said that Christina Romer, chairman of the Council of Economic Advisers, "got about four hugs when she handed us the report."
"Overall, this is the best jobs report we have seen since 2007, Obama said at Lehigh Carbon Community College in Pennsylvania. But, he added, "We've still got a long way to go. I consider one job lost one too many."
The Labor Department's jobs report surprised most financial analysts. Nonfarm payrolls fell by just 11,000, the report said, a sign that companies are beginning to hang on to workers. In October, 111,000 jobs vanished; recently, analysts had expected a much higher number of jobs had been lost in November -- as many as 130,000 or more.
"The numbers are a lot better than we expected," said David Wyss, chief economist of Standard & Poor's. "We're still looking at unemployment rates that are going to be highest since the postwar record in 1982, but this is encouraging . . . . Small negatives are better than big negatives. Flat is the new up."
"It seems the storm has passed," said Bill Cheney, chief economist of John Hancock Financial. "We still have plenty of cleaning up to do, but today's employment report for November is unambiguously good news and provides solid reason for hope as we enter 2010."
"Worries about a jobless recovery should definitely be fading now," he added
Buoyed by the numbers, stocks jumped early Friday, before settling back. They finished the day up modestly.Sectors post gains
In November, jobs were added in temporary help services and health care, while employment fell at a slower rate in the construction, manufacturing and information sectors.
One encouraging sign that business is picking up: The average workweek for nonfarm jobs grew by 12 minutes to 33.2 hours, and the average manufacturing workweek increased by 18 minutes to 40.4 hours. Since May, the manufacturing workweek has increased by one hour. Employers usually increase hours for existing employees while waiting to see whether they need to hire new workers.
In addition, temporary employment rose. "That's usually a good leading indicator," said Wyss. "Usually employers get temporary workers, and when they are convinced that things are getting better, they turn them into permanent workers."
Unemployment also fell across gender and racial lines.
The employment rate for black teenagers, however, fell to an all-time low of 14 percent. In addition, the number of long-term unemployed -- those jobless for 27 weeks or more -- rose by 293,000, to 5.9 million.October figures seem off
Analysts said the November report made it appear that the jump in unemployment from 9.8 percent to 10.2 percent in October reported last month was an aberration. The Labor Department revised the number of jobs lost in October down to 111,000 from the 190,000 figure previously reported.
"Today's report makes the October surge appear to be an outlier," said Dean Maki, chief economist of Barclays Capital. "We do not think the rise in unemployment is going to continue. The next big move in the unemployment rate is down in our view."
The drop in the unemployment rate took place even though government employment rose by only 7,000, almost all of that in the federal government. Squeezed by fiscal problems, state and local governments shed workers outside the education area, which has received substantial aid from the federal government stimulus package.
Not all analysts were convinced by the Labor Department numbers, which are based on a survey of households. "Several other nongovernment indicators, in addition to our tax data, suggest that employment is not as rosy as the Bureau of Labor Statistics is reporting," said Madeline Schnapp, director of macroeconomic research at TrimTabs Investment Research. "Our tax data say wages and salaries are still shrinking, which in our model translates to pretty sizable job losses."
"There are many bumps in the road ahead," said Romer of the Council of Economic Advisers. "The monthly employment and unemployment numbers are volatile and subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, positive or negative. But it is clear we are moving in the right direction."
Staff writers Michael A. Fletcher, Michael D. Shear and David Cho contributed to this report.