Truck driver Kevin Kenneth Koehnke of Appleton, Wis., refueling in South St. Paul, said he’s seen an increase in the commodities he hauls.
JIM GEHRZ • firstname.lastname@example.org,
Jobless rate hits 5-year low; momentum is expected to continue
- Article by: NELSON D. SCHWARTZ
- New York Times
- December 6, 2013 - 11:54 PM
After years of frustrating fits and starts in the wake of the financial crisis and the Great Recession, the U.S. economy finally appears to be generating jobs at a healthier, more sustainable pace that many analysts now think will continue into 2014. The official unemployment rate fell in November to its lowest level since 2008.
Employers have hired at least 200,000 workers in three of the last four months, including 203,000 in November. By contrast, as recently as July, when the economy seemed stuck in yet another summer swoon, only 89,000 new jobs were created.
Friday’s better-than-expected data from the Labor Department follows other hopeful economic indicators this week, including an upward revision for economic growth in the third quarter Thursday and an uptick in manufacturing reported Monday. The 7 percent unemployment rate last month — down from its most recent peak of 10 percent in October 2009 — is the best reading since President Obama took office, providing one bright spot for a White House beleaguered on many other fronts. The unemployment rate was 7.3 percent in December 2008, the month before Obama was inaugurated.
“It’s strong across the board,” said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh. “There is nothing in here not to like.”
Michael Hanson, senior U.S. economist at Bank of America Merrill Lynch ticked off sources of growth: Pent-up demand for automobiles, a rebounding housing sector and the surging stock market.
The stock market rose more than 1 percent after the jobs report, as traders concluded that the prospect of higher employment and faster economic growth outweighed the increased likelihood that the Federal Reserve would soon begin easing back on its stimulus efforts. While there is a chance policymakers will act when they meet this month, most experts say they believe that Fed officials want to see a little more consistency to the data before they begin tapering, probably early in 2014.
“We consider it a strong report but it’s not something that would cause the Fed to move,” said Michael Gapen, senior U.S. economist at Barclays. “Our scenario is still March.”
One reason for remaining cautious is that there have been several false dawns before in the recovery, in 2011 and 2012, when encouraging monthly hiring gains quickly petered out. And some economists warned on Friday that it was too soon to conclude the labor market had turned a corner.
“We still need more evidence that the economy is picking up momentum before we ring the victory bell,” said Julia Coronado, chief economist for North America at BNP Paribas. While the unemployment rate, which counts only people looking for work, has fallen to 7 percent, from 7.8 percent a year ago, she said that was largely because of people dropping out of the workforce.
Moreover, the current level is well above the 5 percent rate economists consider closer to full employment. At the current rate of job creation, unemployment would fall to 6.4 percent by the end of 2014, and still be around 5.7 percent in late 2015.
Job growth in Minnesota has been a little faster than the national average so far in 2013. Unemployment in the state fell in October to 4.8 percent, its lowest level since early 2008, and the state has added an average of 3,440 jobs per month so far in 2013. That’s about 2 percent of U.S. job gains in 2013, even though Minnesota accounts for only 1.7 percent of the U.S. population.
In September and October, most of the jobs Minnesota added were in manufacturing, which added 5,300 positions, and health care, which added 4,300. Hospitals, clinics and doctor’s offices had been hiring steadily through the recession and recovery, but factories had been laying people off for the past year. The spike in factory hiring was a welcome reversal, likely boosted by a late harvest, which kept seasonal food processing jobs going deeper into the fall.
Despite the overall improvement in the employment picture, the situation remains desperate for many U.S. workers and those seeking jobs. For people with less than a high school diploma, for example, the jobless rate last month stood at 10.8 percent. For blacks, it was 12.5 percent, or just over twice what it was for whites.
No improvement was seen in the fate of the long-term unemployed, either, with the ranks of people who have been seeking jobs for more than 27 weeks actually rising slightly in November to 4.06 million. Employers remain wary of workers with long gaps in their resumes.
“We still have a crisis in terms of long-term unemployment,” said Christine Owens, executive director of the National Employment Law Project, an advocacy group for low-wage and unemployed workers.
Still, unlike some other months that presented contradictory signals, many of the underlying factors identified by government statisticians at least pointed in the right direction. Hourly earnings, as well as the length of the typical workweek, both increased.
At the same time, jobs were added to a broad range of sectors, rather than restricted to a few, lower-paying areas. Manufacturing, closely watched because its ups and downs serve as a bellwether of the overall economy, added 27,000 workers.
Staff writer Adam Belz contributed to this report.
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