The Labor Department is reporting the unemployment rate declined to 8.6%, the lowest since March 2009, from 9%. Payrolls climbed 120,000, with more than half the hiring coming from retailers and temporary help agencies, after a revised 100,000 rise in October that was more than initially estimated. The median estimate in a Bloomberg News survey called for a gain of 125,000.
“The labor market is showing very gradual progress, but it is progress,” Stephen Stanley, chief economist for Pierpont Securities LLC, said before the report. “Things are getting a little bit better on the economy. Firms are hiring but staying trim.”
The unemployment rate, derived from a separate survey of households, was forecast to hold at 9 percent, according to the survey median. The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force.
The so-called “underemployment rate”, which includes part-time workers and people who want work but have given up looking, has decreased to 15.6 percent from 16.2 percent. The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more increased as a percentage of all jobless, to 43% from 42.4%.
While the U.S. economy’s growth pace appears to have accelerated from the third quarter’s 2% annual rate, it is still insufficient to cut deeply into the high unemployment rate, and Europe’s festering debt crisis still poses a big threat. U.S. fiscal policy is set to tighten in the new year, even if lawmakers extend a payroll tax cut.
Government employment fell by 20,000. Public payrolls have dropped in 10 of the past 11 months as state and local governments have tightened their belts.
Job gains were seen pretty much across the board, with retail jobs surging 49,800. Construction payrolls fell 12,000 after losing 15,000 jobs in October. Factory jobs edged up 2,000, with most of the gains coming from automakers. Health care and social assistance hiring rose 18,700 after adding 30,300 job in October.