Published: Saturday, December 5, 2009
Unemployment rate drops for October
WASHINGTON — A surprising drop in the unemployment rate and far fewer job losses last month raised hopes Friday for a sustained economic recovery.
The rate unexpectedly fell to 10 percent, from 10.2 percent in October, as employers cut the fewest number of jobs since the recession began. The government also said 159,000 fewer jobs were lost in September and October than first reported.
If part-time workers who want full time jobs and laid-off workers who have given up looking for jobs are included, the so-called underemployment rate also fell, to 17.2 percent from 17.5 percent in October.
The better-than-expected figures provided a rare dose of good news for a labor market that’s lost 7.2 million jobs in two years. The unemployment rate hadn’t fallen since July. Still, the respite may be temporary.
Job creation is expected to remain far too weak in coming months to absorb the 15.4 million unemployed people who are seeking work — and the 11.5 million others who are underemployed. As more people begin seeking work, the jobless rate is likely to resume rising.
Even counting last month’s decline, the unemployment rate has more than doubled since the recession began in December 2007, when it stood at 4.9 percent. And the underemployment rate has jumped to 17.2 percent from 8.7 percent.
“We will need very substantial job growth to get unemployment lower, especially when the labor force ... starts growing again,” said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank.
Still, economists and investors drew hope from the Labor Department report. It said the economy shed 11,000 jobs last month — a sharp improvement from October’s revised total of 111,000. And it was much better than the 130,000 Wall Street economists had expected.
The average work week also rose to 33.2 hours, from a record low of 33 hours, along with average earnings. Economists expect employers will increase hours for their current workers before hiring new ones.
“We’ve still got a long way to go, but the good news in this report provides important positive momentum,” said Carl Riccadonna, senior U.S. economist at Deutsche Bank.
The rate unexpectedly fell to 10 percent, from 10.2 percent in October, as employers cut the fewest number of jobs since the recession began. The government also said 159,000 fewer jobs were lost in September and October than first reported.
If part-time workers who want full time jobs and laid-off workers who have given up looking for jobs are included, the so-called underemployment rate also fell, to 17.2 percent from 17.5 percent in October.
The better-than-expected figures provided a rare dose of good news for a labor market that’s lost 7.2 million jobs in two years. The unemployment rate hadn’t fallen since July. Still, the respite may be temporary.
Job creation is expected to remain far too weak in coming months to absorb the 15.4 million unemployed people who are seeking work — and the 11.5 million others who are underemployed. As more people begin seeking work, the jobless rate is likely to resume rising.
Even counting last month’s decline, the unemployment rate has more than doubled since the recession began in December 2007, when it stood at 4.9 percent. And the underemployment rate has jumped to 17.2 percent from 8.7 percent.
“We will need very substantial job growth to get unemployment lower, especially when the labor force ... starts growing again,” said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank.
Still, economists and investors drew hope from the Labor Department report. It said the economy shed 11,000 jobs last month — a sharp improvement from October’s revised total of 111,000. And it was much better than the 130,000 Wall Street economists had expected.
The average work week also rose to 33.2 hours, from a record low of 33 hours, along with average earnings. Economists expect employers will increase hours for their current workers before hiring new ones.
“We’ve still got a long way to go, but the good news in this report provides important positive momentum,” said Carl Riccadonna, senior U.S. economist at Deutsche Bank.
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