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Economy Added More Jobs Than Expected and Unemployment Rate Drops

by Dec 7, 2012, 9:51 am ET

Confounding predictions of mediocre new hiring and a rise in unemployment, the U.S. Department of Labor this morning said 148,000 new jobs were added to the national economy, while the unemployment rate decreased to 7.7 percent, a four-year low.

Economists were predicting November’s new jobs would come in under 100,000, and that the unemployment rate would remain at 7.9 percent. A few thought it might rise to 8 percent.

The stronger than expected jobs report pushed stock futures higher, portending a positive day for Wall Street.

Hurricane Sandy was widely anticipated to have cut into hiring in the Northeast, especially in New Jersey, New York, and parts of other states which were the hardest hit by the storm. However, the Labor Department’s data collecting and analysis arm, the U.S. Bureau of Labor Statistics, said “Sandy did not substantively impact the national employment and unemployment estimates for November.”

Later this month, the Labor Department will release jobs data by state and region. Those numbers will provide a clearer picture of the storm’s impact. However, this morning’s report offered at least one hint of the effect — construction jobs plummeted by 20,000.

In addition to the storm’s surprisingly minor affect on jobs, another reason the report came in so much higher than expected is that governments across the country stopped bleeding jobs. The post office shed 4,000 positions, while local governments cut 2,000. However state governments added jobs, for a net loss of 1,000 public jobs.

Overall, most private sector job categories grew in November. The service sector added 169,000 positions (manufacturing and construction losses cut into the totals). The largest growth came in the retail sector (52,600), especially in clothing stores which alone added 33,000 jobs. Electronics and appliance added 9,100.

Temp agencies brought on 18,000 workers; the healthcare industry added 20,000, many of them in nursing and residential care facilities. Hospitality also grew strongly, with 14,100 jobs added in arts, entertainment, and recreation; another 9,000 jobs came from restaurants and bars. IT added 7,100.

The Society for Human Resource Management’s LINE report predicts continued strong hiring by the service sector this month. SHRM says 34 percent of service-sector companies will grow payrolls in December, an improvement of 12.2 points over last year and “is the highest net level of hiring for services in December in the past four years.”

Hiring by manufacturers, SHRM predicts, will fall by 3.8 points in the month, as a net of 25.3 percent of employers hire.

Despite the strong November numbers in many areas, looking more broadly, the economy is still anemic. The cloud behind the silver in the numbers came in a reduction of initial job counts for September and October. The adjustments, which occur each month, cut the count by 49,000 jobs. In September, employers added 132,000 jobs, and in October, it was 138,000.

In addition, the decline in the unemployment rate was the result of fewer people looking for work. As many people stopped looking in November as began looking in October, the month when the unemployment rate went up. Overall, said the BLS, “Total employment was about unchanged in November, following a combined increase of 1.3 million over the prior two months.”

Likewise, the total number of workers unemployed or working part-time because they can’t find full-time work stands at 22.7 million, a number that has changed little in the last few months.

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.

  • Keith Halperin

    News and Features

    Jobs Growth Misses Target; Unemployment Rate Drops
    by
    John Zappe
    Jun 4, 2010, 9:37 am ET
    inShare

    Fewer jobs than expected — alas, many fewer private sector jobs — were created in May, suggesting that employers are still not ready to begin hiring in any numbers. So expect a bumpy day in the financial markets.

    The U.S. Bureau of Labor Statistics reported this morning that 431,000 jobs were created last month. That would be a strong signal of a return to historic hiring were it not that 411,000 of those jobs are temporary positions for the U.S. Census. “Private-sector employment changed little (+41,000),” the BLS blandly stated.

    There was improvement in the unemployment rate, which fell to 9.7 percent from 9.9 percent; small consolation when economists were predicting job growth of over half a million, with at least 100,000 from the private sector.

    Furthering tempering the jobs numbers was a revision to the March number, decreasing the initial 230,000 estimate to 208,000. April’s increase of 290,000 jobs added was unchanged.

    Construction was the big loser, down 35,000 jobs. However, manufacturing added 29,000 jobs for the month, the fifth month in a row of gains. Temp help services was also a big gainer, adding 31,000. The sector is considered a bell cow of recovery on the belief that before employers add full-time workers, they bring in temp help. Since September, the sector has added 362,000 jobs.

    Another sign is the continuing growth in the hourly work week. The report said the average week grew to 34.2 hours, up by .1 hour. For manufacturing employees, the workweek increased by .3 hours to an average of 40.5.

    Among the unemployed, 46 percent have been out of work for more than six months. That translates into 6.8 million of the 15 million unemployed. Another 8.8 million are working part time because they can’t find anything else. And 2.2 million are counted as “marginally attached” because they have looked for work, but can’t find anything. They don’t officially get counted as unemployed because they didn’t seek work during the four weeks prior to the BLS survey.

    Private-sector em-
    ployment changed little (+41,000)

    tags: economicdata, economy

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    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.
    7 comments

    rss | trackback

    Keith Halperin Jun 4, 2010 at 12:14 pm

    Keith Sez (Again):

    The Great Recession is over when we have three straight months of 7.0% or less of unemployment.

    Your thoughts….

    Keith Halperin

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