Advertisement
Economic Forecasts

Lower Unemployment in Nov.? Yes, But....

An increase in the long-term unemployed is another bad sign.

The U.S. economy continues to add jobs, but not at a pace that signals a strong recovery.

We expect this year's pace of job creation -- 130,000 a month through November -– to accelerate to only 150,000 a month next year, adding up to 1.8 million new jobs. That should move the unemployment rate, which has averaged 9% this year, down to about 8.5% at end of next year.

Advertisement - Article continues below

Job growth in November of 120,000 was enough to cast out thoughts of another recession. But almost half the increase came in retailing with some strength in hiring at bars and restaurants, temp agencies and health care. Manufacturing added only 2,000 jobs while construction shed 12,000.

November's drop in the jobless rate, to 8.6% from 9%, is a gift that looks nice under the tree but is a little disappointing when the wrapping comes off. Half the drop is due to a shrinking labor force. Ordinarily, a big share of those who choose not to look for work are those who want jobs but are discouraged. One bright spot is that the number of these discouraged workers didn't increase in November. The jobless rate that includes discouraged workers and part-timers who want full-time work fell to 15.6%, from 16.2% in October.

Advertisement
Advertisement - Article continues below

A concern is an increase in those unemployed for 27 weeks or more, 43% of all the jobless, up from 42.4% the previous month. Expect the unemployment rate to move up a bit in early 2012, then decline again but ending the year above 8%.

A key number to watch is private employment because it represents the lion's share of jobs and points to the overall direction of the economy. State and local governments, which typically add jobs during recovery from recession, instead are paring back

Health care jobs will continue to increase next year though the pace is slowing. There's still uncertainty about the scope and pace of Obama's health care reform measures.

There will be only a modest rise for construction. After shedding 2 million jobs during the recession, there's little room to fall further. But gains will be moderate, especially on the residential side, where the inventory of unsold homes remains high. Manufacturing will post a very small gain, too. Firms are putting their money into equipment, and productivity gains enable most to produce more with fewer workers.

Advertisement
Advertisement

Most Popular

What Trump's Payroll Tax Cut Will Mean for You
Tax Breaks

What Trump's Payroll Tax Cut Will Mean for You

President Trump issued an executive order to suspend the collection of Social Security payroll taxes. How much could it save you?
August 13, 2020
8 Things You Must Know About Retiring to the Carolinas
retirement

8 Things You Must Know About Retiring to the Carolinas

From the mountains to the beaches, North Carolina and South Carolina offer retirees plenty of incentives.
August 14, 2020
7 Surprisingly Valuable Assets for a Happy Retirement
happy retirement

7 Surprisingly Valuable Assets for a Happy Retirement

If you want a long and fulfilling retirement, you need more than money. Here are the most valuable retirement assets to have (besides money), and how …
August 3, 2020

Recommended

Worried About Losing Your Job? Take These Steps Now
careers

Worried About Losing Your Job? Take These Steps Now

Get an early start to make the most of an unsettling situation. Here’s where to start.
August 7, 2020
Can Your Boss Make You Go Back to Work?
Coronavirus and Your Money

Can Your Boss Make You Go Back to Work?

Even if you don’t have legal protections, you may be able to negotiate with your boss.
July 30, 2020
Former Baseball Player Doug Glanville Opens Up About Race, Sports During a Pandemic, and His Transition to a New Career
careers

Former Baseball Player Doug Glanville Opens Up About Race, Sports During a Pandemic, and His Transition to a New Career

This ex-baseball player is using his background to bring understanding and advocate for change.
July 30, 2020
Nursing in the Time of COVID-19
Financial Planning

Nursing in the Time of COVID-19

This health care professional warns that the pandemic will worsen the nursing shortage.
July 2, 2020