December 3, 2010: ALMOST everywhere you look, the American recovery seems to be picking up pace. The economy grew faster in the third quarter than originally reported. Industrial production continues to grow. Spending has been surprisingly strong, and the latest figures on pending home sales suggest that even housing markets may be stirring from their deep slump. The growth seems to be everywhere except the place it matters most—labour markets. Employment in America turned in a surprisingly poor performance in November, indicating that recovery still hasn’t gotten the job creation machine turning steadily.
This morning, the Bureau of Labour Statistics reported a disappointing gain of only 39,000 jobs for the month of November. The figure came in well below expectations. In October, the economy grew by an (upwardly revised) 172,000 jobs, and on Wednesday a private employment report estimated that the economy added 93,000 private sector workers. Markets had expected one of the strongest reports of the recovery so far. That’s not what they received.
The unemployment rate rose to 9.8%—its highest level since April and close to the 10.1% recession peak. At 15.1m, the number of unemployed workers rose back to its April high (though some of this increase was due to new entrants to the labour force). Fully 6.3m people have been out of work for more than 27 weeks. Many of these workers are now cycling off federal emergency unemployment benefits, which expired November 30. Congress has yet to reauthorise the emergency benefits package, as it has done so many times through the recession. Some 2m jobless workers may lose benefits by the end of 2010, and perhaps 4m or more will lose them by April.
