The U.S. unemployment rate unexpectedly fell to its lowest level in two-and-a-half years in November, despite the many global crises batting against the economy.
The jobless rate fell to 8.6 percent, after having been stuck around nine percent for most of 2011, the Labor Department said Friday. Additionally, a separate government survey found that the nation’s employers added 120,000 jobs last month, after adding 100,000 jobs in October.
These numbers were not particularly impressive by historical standards — they were just about high enough to keep up with population growth — but employment in the previous two months was revised upward substantially, too.
“If you go back to August, all sorts of people were telling us that the economy was headed straight into recession,” said Paul Ashworth, senior U.S. economist at Capital Economics. “Since that point, we’ve become more and more worried about the eurozone and other areas of the global economy, but somehow, at least for the moment, the U.S. economy seems to be shrugging all that off. “Still, concerns remain about the economy’s ability to withstand these international dangers.
The jobless rate fell partly because more workers got jobs, but also because about 315,000 workers dropped out of the labor force, and the jobless rate counts only people who are actively looking for work. Even so, the country still has a backlog of more than 13 million unemployed workers, whose periods of unemployment averaged an all-time high of 40.9 weeks.
“They say businesses are refusing to look at resumes from the unemployed,” said Esther Perry, 59, of Bedford, Mass., who participated in a recent report on unemployed workers put together by USAction, a liberal coalition. “What do you think my chances are? Once unemployment runs out, I don’t know what I will do.”
Continuing relatively high jobless numbers underscore just how much President Barack Obama needs additional stimulus, a tidy and fast resolution to the European debt crisis or some other economic miracle to reinvigorate the job market before the 2012 presidential election.
On the issue of government action to stimulate the economy, there has been some movement in Washington toward extending the payroll tax cut, which is currently scheduled to expire at the end of this month.
Economists have said that allowing the expiration of the tax cut — which lets more than 160 million mostly middle-class Americans to keep two percentage points more of their pay checks — could be a severe drag on both job creation and output growth.
“If isn’t extended, it will have an impact on consumer spending in the first half of next year because it’ll put a big dent in consumer income,” said Conrad DeQuadros, senior economist at RDQ Economics. “To the extent that reduces spending, there will be second-round effects on hiring.”