WASHINGTON — The unemployment rate dipped and job creation remained steady in November, as the U.S. economy shrugged off any major impact from Hurricane Sandy and showed resilience in the run-up to the “fiscal cliff.”
The November jobs report, released Friday, was a pleasant surprise to analysts who had braced for some ugly numbers for a period during which much of the Northeast was reeling from the superstorm. In fact, the national unemployment rate fell to 7.7 percent from 7.9 percent, and the nation added 146,000 jobs, not the mere 85,000 that forecasters had expected.
But the report contained some ominous elements as well. The jobless rate fell because 229,000 people without jobs stopped looking for work and so were no longer counted as unemployed. The number of people saying they had a job actually fell by 122,000. And the Labor Department revised downward its estimates of job creation in September and October by a combined 49,000 jobs.
Add it all up, and the conclusion is this: The trend that many thought was under way, of a U.S. economy growing steadily but at an unspectacular pace, remains under way. It was not undone either by the hurricane or by anxiety over looming austerity — the tax hikes and spending cuts scheduled to take effect Jan. 1 if Congress and the White House can’t reach a deal.
Indeed, the job market has been remarkably consistent over the past year, adding an average of 157,000 jobs a month — well above the level needed to keep pace with a growing labor force, but slow enough that it would still take years to bring unemployment down to the 5 percent to 6 percent range. The new report shows no real shift in that trend, which in its way is still good news: It suggests that businesses did not bring their hiring to a halt in November out of fear that lawmakers will be unable to reach a deal and the nation will hit the fiscal cliff.
The report was “stronger than feared but does not materially change the outlook for the labor market,” economist Ryan Wang of HSBC said in a research note.
Investors appeared pleased with the report. The Dow Jones industrial average closed up 81 points.
Alan Gin, an economist at the University of San Diego, called it a fairly good report. He said while the labor force did get smaller, the U-6 rate — which includes people who want a job but aren’t looking and part-timers who can’t find full-time work — dropped from 14.6 to 14.4.
“If there had been a surge in discouraged workers, then the U-6 rate wouldn’t have dropped,” he said.
While the unemployment rate didn’t go down due to more people getting jobs, payroll employment data — a separate measure — reflected 146,000 new positions added in November.
Lynn Reaser, chief economist at Point Loma Nazarene University, called the 146,000 new jobs a surprisingly good number given Hurricane Sandy, which made landfall on Oct. 29.
“It hit a key part of the country, so people couldn’t get to work and output was lost,” he said. “It will be reversed significantly in the next few months. We’ll get a little boost as some people get back to work, and they hire some people to clean up the mess.”
The November report is the first snapshot of the job market released since President Barack Obama was re-elected Nov. 6, and the first since negotiations over deficit reduction between the White House and House Republicans over the fiscal cliff have resumed and intensified.
Responding to the report Friday morning, House Speaker John Boehner, R-Ohio, referred to those negotiations and focused on the people who are out of work rather than on the drop in the jobless rate.
“The Democrats’ slow-walk strategy is unfair to taxpayers, unfair to small businesses, and unfair to all those looking for work,” Boehner said in a statement. “If the president doesn’t like our plan, he has an obligation to send us one that can pass both houses of Congress as quickly as possible. We’re ready and eager to work with him on such a proposal.”
Worries about the cliff have led some companies to cut back on purchases of heavy equipment. Consumers are also signaling concern. A survey of consumer sentiment fell sharply in December, economists noted, partly over worries that taxes could rise next year.
“If we do go over the cliff, even though all of the cuts and tax increases won’t go into effect immediately, the impact on the economy will be seriously negative,” said Dan Seiver, chief economist at San Diego-based Reilly Financial Advisors. “We will start undoing all the progress we’ve made in the recession.”
Alan Krueger, chairman of the White House Council of Economic Advisers, said in a statement that “while more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression.”
Forecasters had expected a significant impact from Sandy, which disrupted commerce in large parts of New Jersey, New York and surrounding states. The level of new claims for unemployment benefits spiked from about 370,000 before the storm to 451,000 in the first week of November.
But the Labor Department said that “survey response rates in the affected states were within normal ranges” and that “our analysis suggests that Hurricane Sandy did not substantively impact the national employment and unemployment estimates for November.” More detailed data will be available Dec. 21, when state jobs numbers will be released, allowing a closer look at any employment changes in the affected states.
The biggest category for job gains was the retail sector, which added 53,000 positions. But that growth could be due to Thanksgiving falling relatively early on the calendar this year, meaning retailers likely added temporary seasonal workers earlier than they normally would.
Other major sectors that saw job gains were professional and business services, which added 43,000 jobs, and leisure and hospitality, with 23,000.
The biggest category for job losses was construction, which shed 20,000 positions, though that may well be a Sandy effect, as construction sites temporarily shut down in the Northeast. If that’s the case, that sector will be expected to rebound in the months ahead.
Average hourly pay for private sector workers rose four cents to $23.63, a 0.3 percent increase in average weekly earnings.
By NEIL IRWIN
THE WASHINGTON POST
Staff writer from UT San Diego, Jonathan Horn, contributed to this report.
The November jobs report, released Friday, was a pleasant surprise to analysts who had braced for some ugly numbers for a period during which much of the Northeast was reeling from the superstorm. In fact, the national unemployment rate fell to 7.7 percent from 7.9 percent, and the nation added 146,000 jobs, not the mere 85,000 that forecasters had expected.
But the report contained some ominous elements as well. The jobless rate fell because 229,000 people without jobs stopped looking for work and so were no longer counted as unemployed. The number of people saying they had a job actually fell by 122,000. And the Labor Department revised downward its estimates of job creation in September and October by a combined 49,000 jobs.
Add it all up, and the conclusion is this: The trend that many thought was under way, of a U.S. economy growing steadily but at an unspectacular pace, remains under way. It was not undone either by the hurricane or by anxiety over looming austerity — the tax hikes and spending cuts scheduled to take effect Jan. 1 if Congress and the White House can’t reach a deal.
Indeed, the job market has been remarkably consistent over the past year, adding an average of 157,000 jobs a month — well above the level needed to keep pace with a growing labor force, but slow enough that it would still take years to bring unemployment down to the 5 percent to 6 percent range. The new report shows no real shift in that trend, which in its way is still good news: It suggests that businesses did not bring their hiring to a halt in November out of fear that lawmakers will be unable to reach a deal and the nation will hit the fiscal cliff.
The report was “stronger than feared but does not materially change the outlook for the labor market,” economist Ryan Wang of HSBC said in a research note.
Investors appeared pleased with the report. The Dow Jones industrial average closed up 81 points.
Alan Gin, an economist at the University of San Diego, called it a fairly good report. He said while the labor force did get smaller, the U-6 rate — which includes people who want a job but aren’t looking and part-timers who can’t find full-time work — dropped from 14.6 to 14.4.
“If there had been a surge in discouraged workers, then the U-6 rate wouldn’t have dropped,” he said.
While the unemployment rate didn’t go down due to more people getting jobs, payroll employment data — a separate measure — reflected 146,000 new positions added in November.
Lynn Reaser, chief economist at Point Loma Nazarene University, called the 146,000 new jobs a surprisingly good number given Hurricane Sandy, which made landfall on Oct. 29.
“It hit a key part of the country, so people couldn’t get to work and output was lost,” he said. “It will be reversed significantly in the next few months. We’ll get a little boost as some people get back to work, and they hire some people to clean up the mess.”
The November report is the first snapshot of the job market released since President Barack Obama was re-elected Nov. 6, and the first since negotiations over deficit reduction between the White House and House Republicans over the fiscal cliff have resumed and intensified.
Responding to the report Friday morning, House Speaker John Boehner, R-Ohio, referred to those negotiations and focused on the people who are out of work rather than on the drop in the jobless rate.
“The Democrats’ slow-walk strategy is unfair to taxpayers, unfair to small businesses, and unfair to all those looking for work,” Boehner said in a statement. “If the president doesn’t like our plan, he has an obligation to send us one that can pass both houses of Congress as quickly as possible. We’re ready and eager to work with him on such a proposal.”
Worries about the cliff have led some companies to cut back on purchases of heavy equipment. Consumers are also signaling concern. A survey of consumer sentiment fell sharply in December, economists noted, partly over worries that taxes could rise next year.
“If we do go over the cliff, even though all of the cuts and tax increases won’t go into effect immediately, the impact on the economy will be seriously negative,” said Dan Seiver, chief economist at San Diego-based Reilly Financial Advisors. “We will start undoing all the progress we’ve made in the recession.”
Alan Krueger, chairman of the White House Council of Economic Advisers, said in a statement that “while more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression.”
Forecasters had expected a significant impact from Sandy, which disrupted commerce in large parts of New Jersey, New York and surrounding states. The level of new claims for unemployment benefits spiked from about 370,000 before the storm to 451,000 in the first week of November.
But the Labor Department said that “survey response rates in the affected states were within normal ranges” and that “our analysis suggests that Hurricane Sandy did not substantively impact the national employment and unemployment estimates for November.” More detailed data will be available Dec. 21, when state jobs numbers will be released, allowing a closer look at any employment changes in the affected states.
The biggest category for job gains was the retail sector, which added 53,000 positions. But that growth could be due to Thanksgiving falling relatively early on the calendar this year, meaning retailers likely added temporary seasonal workers earlier than they normally would.
Other major sectors that saw job gains were professional and business services, which added 43,000 jobs, and leisure and hospitality, with 23,000.
The biggest category for job losses was construction, which shed 20,000 positions, though that may well be a Sandy effect, as construction sites temporarily shut down in the Northeast. If that’s the case, that sector will be expected to rebound in the months ahead.
Average hourly pay for private sector workers rose four cents to $23.63, a 0.3 percent increase in average weekly earnings.
By NEIL IRWIN
THE WASHINGTON POST
Staff writer from UT San Diego, Jonathan Horn, contributed to this report.
