Unemployment rate falls to 5.9 percent in November
Saturday, December 6, 2003
WASHINGTON -- The economy's four-month hiring spree slowed in November, raising new questions about revival in the jobs market even as the unemployment rate edged down to 5.9 percent.
As one economist put it: "Ho, ho hum."
Friday's Labor Department report "is like getting just the Christmas present you wanted, but two sizes too small," said Bill Cheney, chief economist at John Hancock Financial Services Inc.
U.S. companies added 57,000 new jobs last month to boost payrolls by 328,000 in the last four months. But the showing disappointed analysts, who expected November's job growth to surge by 150,000 after recent data showed the economy was gaining strength.
Stocks retreated on the report. The Dow Jones industrial average closed down 68 points and the Nasdaq was down 30.
The jobless rate fell last month from 6 percent in October to an eight-month low of 5.9 percent. Economists had predicted the rate would hold at 6 percent.
Democrats have been hoping to use a dismal jobs outlook to reclaim the White House next year. But improvements, however slight, could benefit President Bush.
"We've overcome a lot. We have a strong country, a strong economy," Bush told small business owners and employees Friday at a Home Depot store in Halethorpe, Md., after the unemployment report was released.
As for next year, Labor Secretary Elaine Chao was optimistic. "Many other economic indicators point toward continued job growth well into the new year," she said in a statement.
Weekly claims for unemployment insurance have fallen since April, and economic growth and productivity in the third-quarter reached 20-year highs.
But for sustained job growth, economists are looking for monthly payroll gains of 200,000 to 300,000 to significantly lower the unemployment rate.
The jobs market "is not improving as fast as we thought it was," said David Wyss, chief economist at Standard and Poor's DRI.
"It's true we've had four consecutive months of payroll growth, which is a start. But it's only a bare start."
Holding down overall payrolls last month were the grocery store strikes in California, Missouri and elsewhere, the Labor Department said. As many as 30,800 jobs were lost because workers were on strike or locked out, or, as in St. Louis, replacement workers were no longer needed because the dispute was resolved.
Long-term unemployment in November surpassed a 20-year high. Nearly 24 percent of the jobless, or 2 million people, have been out of work for more than six months, the highest percentage since July 1983.
Democrats want to extend long-term unemployment benefits a third time before Congress adjourns next week, but their success isn't likely. The program expires mid-month and, starting Dec. 21, about 90,000 people a week will not have access to extra benefits.
"Somehow we can afford tax breaks for millionaires and a war in Iraq, but we can't afford to help the unemployed. It's a disgrace," said Rep. Charles Rangel, D-N.Y.
The nation's factories continue to struggle. Job losses continued for the 40th consecutive month in November, with payrolls falling by 17,000. But the pace has slowed significantly.
In a sign of possibly better days ahead for manufacturing, the Commerce Department said Friday that new orders to U.S. factories rose by 2.2 percent in October, the strongest increase in 15 months. The gain, the fifth increase in the past six months, was led by strong demand for military hardware and transportation equipment.
In a third economic report, the Federal Reserve said that consumers were more cautious about taking on new debt in October, increasing their borrowing by just 0.6 percent at an annual rate after sizable gains of 10.4 percent in September and 6 percent in August.
The jobs market has been a weak link in the recovery, with companies hesitant to hire new full-time workers out of concern that the improvements wouldn't last. Instead, employers have been working their employees longer and harder.
The services sector continued to drive employment gains, with health care and social services jumping by 25,000 in November. Hotels and lodging facilities created 13,000 new positions. Hiring also occurred in education, government and professional and business services.
In the goods-producing category, construction employment was up last month by 10,000.
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