U.S. unemployment rate drops to two-year low of 8.6% — ‘good news, not great news’

 

Dec. 2 (Bloomberg) — Unemployment in the U.S. unexpectedly dropped in November to a two-year low, while employers added fewer workers than projected and earnings eased, indicating the labor market is making limited progress.

The jobless rate declined to 8.6 percent, the lowest since March 2009, from 9 percent, Labor Department figures showed today in Washington. 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. The median estimate in a Bloomberg News survey called for a 125,000 gain.

 

 

Companies like DirecTV have said they will keep a tight rein on spending and employment in 2012, reflecting concern over the outlook for demand, Europe’s debt crisis and the U.S. deficit. The scant number of jobs is limiting wage gains and restraining consumers’ ability to boost spending, which accounts for about 70 percent of the economy.

“It’s good news, not great news,” said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts, who projected a 125,000 gain in payrolls. “The labor market is gradually healing. I wouldn’t take huge comfort that the unemployment rate is falling but some comfort that it’s edging down.”

Bloomberg survey estimates ranged from increases of 75,000 to 175,000.

Stock-index futures maintained gains after the figures. The contract on the Standard & Poor’s 500 index expiring this month rose 1 percent to 1,255.6 at 8:46 a.m. in New York. The yield on the benchmark 10-year Treasury note rose to 2.11 percent from 2.09 percent late yesterday.

Unemployment Rate

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 labor participation rate declined to 64 percent from 64.2 percent.

Private hiring, which excludes government agencies, rose 140,000 after a revised gain of 117,000. It was projected to rise by 150,000, the survey showed.

Revisions to prior reports added a total of 72,000 jobs to payrolls in September and October.

Factory payrolls increased by 2,000, less than the survey forecast of a 9,000 increase and following a 6,000 gain in the previous month.

Retail Hiring

Employment at service-providers increased 126,000, including a 50,000 gain in retail trade at companies hired for the holiday shopping season. The number of temporary workers increased 22,300.

Macy’s Inc., the second-biggest U.S. department-store chain, increased mostly part-time staff by 4 percent for the November-December shopping season. See’s Candies Inc., a chocolate maker owned by Berkshire Hathaway Inc., said it would add 5,500 mostly temporary workers.

Construction companies shed 12,000 workers. Government payrolls decreased by 20,000. State and local governments employment dropped by 16,000, while the federal government trimmed 4,000 positions.

Average hourly earnings fell 0.1 percent to $23.18, today’s report showed. The average work week for all workers held at 34.3 hours.

 

http://www.washingtonpost.com/business/us-unemployment-rate-drops-to-two-year-low-of-86percent–good-news-not-great-news/2011/12/02/gIQA1a7fKO_story.html

 

And another sign of recovery? Will the recovery continues? How about US’s economic fundamental background? Does that pointing to the same direction too?

 

Cheers!

~ by extendasia on December 2, 2011.

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