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Anemic Jobs Report Surprises Economists As Unemployment Rises

by Dec 3, 2010, 9:36 am ET

After three months of holding steady, the U.S. unemployment rate took a surprise jump last month, rising to 9.8 percent. It had been at 9.6 percent. At the same time, only 39,000 new jobs were added during November, far less than the expectations of most economists.

A Reuters survey of economists prior to this morning’s report from the U.S. Bureau of Labor Statistics put the average job growth prediction at 130,000. A Marketwatch survey said the average prediction was 155,000.

The November labor report is likely to depress markets today, which had been primed for good news after a week of positive economic news. On Wednesday, the ADP National Employment Report, said the nation added 93,000 private sector workers to payrolls during November, the largest increase in three years. The BLS said 50,000 private sector jobs were added. Cutbacks in government jobs reduced that by 11,000.

Particularly discouraging was how widespread the job growth weakness was. Manufacturing, retail, construction, government, and finance all showed declines. IT registered an anemic 1,000 new jobs. The only significant growth came in health care (up 19,200) and temp work (up 39,500).

One of the grimmer statistics in the BLS report is the number of long term unemployed. Of the 15.1 million unemployed workers, 6.3 million have been out of work for more than six months. Not counted as unemployed, because they didn’t fit the specific criteria were another 2.5 million, an increase of 200,000 over last year.

Another 9 million Americans are working part time because they can’t find full time jobs.

One positive in the report: The number of jobs created in October was revised upward from 151,000 to 172,000, and the September numbers were revised from a loss of 41,000 to a loss of 24,000.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

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  • Paul Lipman

    Frankly, I’m tired of reading the gloom and doom of the employment pundants. As a 3rd party recruiter, I’m turning away business – People are looking and needing GOOD QUALITY Candidates. (We’re growing our internal staff to handle this)

    While actual hiring may have been lower, the trend in
    job postings (which means hiring for December/January is significantly hire)

    Just look at these figures: http://www.indeed.com/jobtrends/industry

    Industry Employment Trends November 2010
    Industry Job Postings Change vs. Prior
    Month Quarter Year
    Accounting 161,562 32%
    Construction 119,696 46%
    Education 124,828 9%
    Financial Services and Banking 293,716 48%
    Healthcare 755,484 11%
    Hospitality 127,599 62%
    Information Technology 387,047 62%
    Manufacturing 129,259 73%
    Media and Newspaper 51,572 65%
    Real Estate 34,521 33%
    Retail 451,039 71%
    Transportation 149,583 92%

  • Keith Halperin

    @Paul: I’m glad your business is doing well.
    Meanwhile here’s what the experts say:
    http://web.rollins.edu/~wseyfried/forecast.htm

    Recent Economic Forecasts

    Fed Forecast as of Nov, 2010: economic growth = 3-3.6% in 2011 and 3.6-4.5% in 2012 (note: these are from 4th quarter to 4th quarter while other forecasts compare yearly averages); unemployment rate = 8.9-9.1% in 2011 and 7.1-7.5% in 2012 (estimates are for 4th quarter of the respective year); natural rate of unemployment = 5 to 6% (range = 5 to 6.3%); inflation as measured by core PCE index of 0.8% to 1% in 2010, 0.9 to 1.6% in 2011 and 1 to 1.6% in 2012

    NABE (Bloomberg, Nov 2010): forecasts for 2011 – economic growth = 2.6%, core inflation = 1.3%, unemployment rate = 9.2% at end of year, 10-year Treasury = 3.25% at end of 2011

    Univ. of Michigan Economic Forecast (executive summary – Nov 18, 2010): economic growth = 1.9% in Q4 of 2010, 2.3% in 2011, 3.3% in 2012; core inflation (CPI) = 1% in 2010, 1.2% in 2011 and 1.7% in 2012; unemployment rate averages 9.6% in 2011 and declines to 9% by end of 2012

    Survey of Professional Forecasters (latest survey Nov 2010): economic growth = 2.2% in Q4, 2.5% in 2011, 2.9% in 2012, 3% in 2013; core inflation (PCE) = 1.2% in 2011 and 1.6% in 2012 (overall PCE inflation = 1.2% in 2010, 1.7% in 2011, 1.8% in 2012); unemployment rate = 9.6% in fourth quarter 2010, 9% in 2011Q4; average unemployment rate = 8.7% in 2012

    Wells Fargo Securities Economic Forecast (latest forecast: Nov 2010): economic growth = 1.9% in fourth quarter, 2.3% in 2011 and 3% in 2012; core PCE inflation = 1% in 2011 and 1.5% in 2012; unemployment rate rises to 9.9% in the first quarter of 2011; declining to 9.5% in the fourth quarter of 2011 and 8.6% by the end of 2012; Fed begins to raise interest rates in the third quarter of 2012

    Bloomberg (Nov 11, 2010): economic growth = 2.2% in fourth quarter 2010, quarterly growth rises to 3.2% in fourth quarter of 2011; unemployment averages 9.3% in 2011

    Quarterly economic survey (USA Today – Oct 2010): economic growth = 2.2% in fourth quarter, 2.8% in 2011; unemployment = 9.7% at end of 2010, 9.2% in fourth quarter of 2011; inflation = 1.1% in 2010, 1.7% in 2011

    Associated Press Survey (Oct 2010): unemployment declines to 9% by end of 2011; economic growth = 2.7% in 2011, inflation = 1.7% in 2011

    Economic forecasting survey, Oct 2010 (WSJ): economic growth = 2.5% in 2010 (2.1% in second half), 2.8% in 2011; unemployment at 9.6% at end of 2010, 9% at end of 2011; inflation = 1.2% in 2010; 1.8% in 2011

    NABE forecast (Oct 2010): economic growth = 2.6% in 2010 and 2011; unemployment = 9.5% in summer 2011, 9.2% by end of 2011; core inflation = 1% in 2010, 1.4% in 2011, fed funds rate = 0.5% by end of 2011; budget deficit = $1.2 trillion in 2011

    IMF (Oct 2010): includes global forecasts; US economic growth = 2.6% in 2010, 2.3% in 2011

    OECD forecast (see p3 – Sep 2010): economic growth = 2.6% in 2010 and 2011; unemployment rate 9.7% by end of 2010, 8.5% by end of 2011, inflation =0.8% in 2010 and 1.1% in 2011

    CNN-Money survey (Sep 20): lists forecasts of key economic variables by 31 economists; average forecasts for 2011 – unemployment in Dec 2011 = 9%, economic growth = 2.8%, inflation = 1.7%

    Reuters Survey (Sep 8, 2010): economic growth = 1.8% in 3rd quarter, 2.1% in 4th quarter, 2.4% in 2011

    Morgan Stanley (Aug 31 2010): economic growth = 2-2.5% in second half of 2010, unemployment = 9.7% by end of 2010; economic growth = 3% in 2011

    CBO (Aug 2010): note – assumes all Bush tax cuts expire and other policy changes that are unlikely (need to make forecast assuming current policy; results in weaker forecast); economic growth (end of year comparisons) = 2.8% in 2010, 2% in 2011; unemployment = 9.3% in fourth quarter 2010, 8.8% in 2011Q4, core PCE inflation = 0.9% in 2010 and 1.1% in 2011; growth in potential GDP = 2.1% from 2010-2014 and 2.4% from 2015-2020

    Blue Chip Economic Forecast (CNBC-Aug 2010): economic
    growth = 2.4% in Q3, 2.7% in Q4, unemployment rate = 9.4% at end of 2010

    OMB (July 23, 2010 – see p9): economic growth (end of year comparisons) = 3.1% in 2010, 4% in 2011; unemployment = 9.6% in 2010, 8.7% in 2011 (declines to 6% at the end of 2014); inflation = 1% in 2010, 1.6% in 2011; natural rate of unemployment = 5.2%, growth in potential GDP = 2.5%

    ABA forecasting survey (June 2010 – WSJ): economic growth = 3.2% in 2010, 3% in 2011; unemployment rate declines to 8.5% by end of 2011; inflation remains low; Fed starts raising rates in 2011 (1.5% federal funds rate by end of 2011)

    Livingston Survey (latest survey – June 2010): economic growth = 3.3% for the second half of 2010, 3% for the first half of 2011; unemployment rate = 9.5% in Dec 2010 and 9.1% in June 2011; inflation (CPI) = 1.8% for 2010 and 1.7% for 2011

  • http://www.johnstonsearch.com/blog Brian Kevin Johnston

    Great ARTICLE!

    Paul- Thanks for your comment… Like you I am scrambling to hire support staff for our growth, and turning down/referring business monthly… I commend you for “not participating” in the great recession… Best to ALL, Brian-

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