Unemployment jumps, job creation slows. Is economic stall-out here?
Unemployment rate rose to 9.8 percent, as US economy gained a disappointing 39,000 jobs last month, versus 172,000 in October. The news may prod Congress toward more stimulus spending.
The American jobs machine seems to have slipped into slow-motion mode in November.Skip to next paragraph
Subscribe Today to the Monitor
The US economy gained a disappointing 39,000 jobs last month and the unemployment rate rose to 9.8 percent, up from 9.6 percent, the Labor Department reported Friday. This was a sharp drop-off from October, when the nation's economy added 172,000 jobs.
The report was a surprise to many economists, who had expected much better numbers given that recent statistics indicated that the economy was showing some signs of strength. Retailers, for example, have in recent days reported better-than-expected sales, but the jobs report showed a loss of 28,000 jobs in the sector. Moreover, some recent surveys pointed to greater optimism among consumers and businesses, but the November report showed very few sectors adding jobs, stagnant worker hours, and a rising tide of unemployed workers.
Economists will be taking a closer look at the report to try to glean whether November was an aberration or a sign of economic stall-out. The report may also be a catalyst for Congress and President Obama to reach an agreement on how to extend the Bush tax cuts, in a bid to eliminate uncertainty about the tax load businesses will bear after this year. It may also act as a prod for Congress to renew the extended benefits program for the unemployed.
In Washington, Austan Goolsbee, chairman of the president's Council of Economic Advisers, noted that the private sector continues to hire, with 50,000 jobs created last month. He argued that Congress should extend the expiring tax cuts for the middle class and the already-expired unemployment benefits.
“Failure to do this would jeopardize hundreds of thousands of additional jobs, and leave millions of Americans, who are out of work through no fault of their own, on their own,” said Mr. Goolsbee in a statement.
Republican House leader and Speaker-in-waiting John Boehner called on the lame-duck Congress to “do the right thing and vote immediately to cut spending and stop all the tax hikes.”