Ed Dolan's Econ Blog

US Unemployment Drops to 7.7 Percent, Lowest Since January 2009; Payroll Jobs Continue Steady Rise

The U.S. unemployment rate dropped to 7.7 percent in November, according to today’s data release from the Bureau of Labor Statistics. That was down 0.2 percent since October, and was the lowest rate reported since January 2009. Payroll jobs increased by 146,000 in the month, continuing a moderate but steady trend.

The unemployment rate is the ratio of unemployed persons to the civilian labor force, based on a monthly survey of households. Both the numerator and denominator of the ratio decreased in November. The ratio fell because the number of unemployed persons decreased by more than the number of the employed. Both the labor force participation rate and the employment-population ratio decreased slightly, with both figures returning to the values reported in September.

The BLS also reports a broader measure of unemployment, U-6, which includes people who would like to work but are not looking because they think no jobs are available, and people who are working part-time but would prefer full-time work. U-6 decreased to 14.4 percent in November, its lowest level since December 2008.

The payroll jobs numbers come from a separate monthly survey of business establishments. The establishment survey, unlike the household survey, excludes farm workers and self-employed persons. Private sector payroll jobs increased by 147,000 in November while government job decreased by 1,000. The establishment survey is subject to revision as more complete data come in. The BLS revised the previously reported job gain for October downward from 171,000 to 138,000. The September figure was revised downward from 148,000 to 132,000.

Most of the new jobs were in the service sector, with retail trade showing especially strong gains. (The data are seasonally adjusted, so the data should be interpreted as meaning that stores were hiring more than the usual number of workers in advance of the holiday season.) Goods producing sectors as a whole lost jobs, although there were small gains in motor vehicle manufacturing and in mining and logging.

The number of long-term unemployed has been unusually high throughout the recent recession and recovery, but has begun a gradual decrease during 2012. That trend continued in November, as the percentage of unemployed workers who had been out of a job for 27 weeks or more fell to 40.1 percent from 40.6 percent in October. That rate had peaked at 45.5 percent in March 2011.

On the whole, although employment gains were modest, the November data are positive. Contrary to some fears, the BLS reported that superstorm Sandy, which hit the Northeast at the end of October, had little adverse effect on the national jobs numbers. Furthermore, it is encouraging to see that the U.S. job market continues to move ahead despite recession in Europe and slowing growth in China and several other emerging-market trading partners. If current negotiations succeed in lifting uncertainty over the course of fiscal policy, the labor market should be well positioned for further gains in 2013.

US Unemployment Drops to 7.7 Percent, Lowest Since January 2009; Payroll Jobs Continue Steady Rise


One Response to “US Unemployment Drops to 7.7 Percent, Lowest Since January 2009; Payroll Jobs Continue Steady Rise”

lkofenglishDecember 9th, 2012 at 8:57 pm

command and control economics always has trade-offs. clearly this one's orientation on "jobs" has been "inflation." as in "we have a lot more than is stated." if the Greenspan Fed moved far too late to contain the last bubble…what could these same people say about the current policy? and the answer of course is "nothing." what a total rip-off of the American tax payer. if state and local defaults start rolling in the pressure to "do something" on Capitol Hill will become truly spectacular. I will be watching the dollar for any signs of "those things being supposedly done." that would be a profoundly LOWER dollar. so few things actually make money in this world…