Unemployment drops to 2 1/2-year low, economy ‘gaining momentum'

There was welcome, but mixed, news on the jobs front Friday as the Labor Department reported the national unemployment rate fell sharply to 8.6 percent in November from 9 percent in October, hitting the lowest level since March 2009.

But problems persist, particularly for the long-term unemployed, and many people gave up looking for work.

Still, the report showed 120,000 jobs were created, and the government revised upward job creation numbers for September and October to show 72,000 more jobs were added than previously thought.

The report shows “a continuing trend of slow, but steady growth in employment,” said Chicago-based Morningstar Inc. economist Robert Johnson. “I don’t think it’s wildly bullish, but I’m pleased we continued to add jobs.”

The decline in the unemployment rate was due in part to a roughly 600,000 drop last month in the number of unemployed people to 13.3 million from nearly 13.9 million in October, noted Diane Swonk, economist with Chicago-based Mesirow Financial. But almost half of that decline can be attributed to people giving up looking for work or retiring Swonk said. On the bright side, the other half represented people who found jobs.

The number of long-term unemployed fell to 5.69 million from 5.88 million. But that group made up 43 percent of all the unemployed, rising from 42.4 percent in October.

The “people who are getting the jobs are the newly unemployed,” Swonk said. “The gains that we’re seeing in employment are clearly not helping the long-term unemployed, those who are the most at risk for losing their unemployment insurance and, more importantly, dropping into poverty.”

Still she noted, “the labor market has clearly stabilized after faltering during the spring and early summer and appears to be gaining momentum again.”

The report showed the private sector added 140,000 jobs. Industries adding jobs included retail trade, up nearly 50,000; and leisure and hospitality up 22,000 as employers geared up for the holiday season. Professional and business services added 33,000 jobs, and health care added 17,000. Manufacturing employment rose by only 2,000 jobs. The government sector shed 20,000 jobs and construction lost 12,000 jobs.

The unemployment rate rose for blacks to 15.5 percent from 15.1 percent and was unchanged for Hispanics at 11.4 percent. The rate fell for whites to 7.6 percent from 8 percent. It also declined for Asians to 6.5 percent from 7.3 percent.

Workers earned slightly less last month. The large number of lower-paying retail jobs contributed to a 0.1 percent dip in average hourly earnings for all workers to $23.18.