Employers shed 11,000 jobs in November, far fewer than projected, and the unemployment rate fell two-tenths of a percentage point for the month to 10 percent, two surprising Labor Department surveys reported Friday.
Mainstream economists had projected that the economy would lose another 150,000 jobs in November, but the Labor Department’s survey of businesses found a net loss of 11,000.
Last month, the jobs report delivered an unpleasant surprise when the unemployment rate jumped sharply to 10.2 percent.
“This month’s job report was as good as last month’s was bad. The reality is probably somewhere in between. That is, the job market is extraordinarily weak and still getting weaker, but moving in the right direction,” said Mark Zandi, the chief economist of forecaster Moody’s Economy.com in West Chester, Pa.
Unexpectedly strong hiring in the category of business and professional services, which added 86,000 jobs, powered November’s improvement.
“Temporary help services accounted for the majority of the increase, adding 52,000 jobs. Since July, temporary help services employment has risen by 117,000,” the Bureau of Labor Statistics report said.
The temp hiring number was the largest jump in five years, analysts said.
The trend is important. Temporary hiring is a harbinger of broader employment, since companies first bring in temp workers to gauge whether economic conditions warrant a return to full-time hiring, which increases their costs for health care and other obligations.
Other positive sectors included health services, which improved by a solid 40,000 positions, and government hiring, which increased by 7,000 positions.
President Barack Obama traveled to Allentown, Pa., on Friday to promote his efforts to create jobs, but Labor Secretary Hilda Solis was careful not to sound too upbeat.
“We take this very seriously. We’re not going to be celebrating and jumping up and down,” she told CNBC television, saying that celebration will begin only when statistics show a net gain in jobs.
However, Christina Romer, the chair of Obama’s Council of Economic Advisers, issued a statement declaring the report “by far the closest we have been to stable employment since the recession began almost two years ago.” Even so, she acknowledged, “there are many bumps in the road ahead. … But it is clear we are moving in the right direction.”
One sobering note: The work force declined by 98,000 in November, and most analysts expect the jobless rate to keep rising in the months ahead.
“The leading indicators in the report ? including more temp jobs, the increase in hours worked and the gain in household employment ? are all pointing to a stable job market by early next year,” Zandi said. “However, there are still more job losses to go over the next several months, and unemployment will rise into next summer.
“The labor force continues to contract, which is very unusual, and will ultimately begin to rise as discouraged workers step back in and those with severance and (unemployment) benefits begin to run out of funds and need to resume looking for work.”
The better-than-expected report sent stocks soaring at the open of trading Friday. The Dow Jones Industrial Average shot up more than 135 points within the first 15 minutes.
Adding to the positive news, the BLS revised its October jobless numbers to a loss of 111,000 jobs, not the 190,000 first reported. September job losses of 219,000 also were revised down to 139,000 jobs lost.
Friday’s report found that average hours worked ticked up by two-tenths of a percentage point, showing that workers are getting more hours on the job. There also was significant improvement in an important broader measure of employment, which includes people who are working part time when they want full-time jobs or have stopped looking for work but want to work. This measure of underutilization of the labor force fell from 17.5 percent of the work force to 17.2 percent.
It all points to an economy that’s slowly gathering steam.
“The initial jobless claims data for the last two weeks had led us to talk about being closer to the point of net job creation than we had previously thought,” forecaster RDQ Economics in New York said in a note to investors.
Combine November’s few job losses with the sharp revisions to earlier months’ numbers “and it is beginning to look like December could be the first month to show a positive payroll print,” RDQ said.
In fact, when the November report is revised after the BLS gets more complete data, it’s possible that it’ll show that the economy added jobs for the first time in two years.
Even so, analysts said unemployment was likely to remain high for some time.
“We will need very substantial job growth to get unemployment lower, especially when the labor force re-enters and starts growing again,” said Lawrence Mishel, the president of the Economic Policy Institute, a liberal policy-research organization.
NOVEMBER EMPLOYMENT BY SECTOR:
? Manufacturing, down 41,000.
? Construction, fell by 27,000.
? Retail, off 15,000.
? Leisure and hospitality, down 11,000.
? Government, up 7,000.
? Health care and education, plus 40,000.
? Professional and business services, plus 86,000.
(c) 2009, McClatchy-Tribune Information Services.