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Friday, December 07, 2012

'Unemployment Rate Edges Down to 7.7 Percent as Job Growth Slows'

Dean Baker:

Unemployment Rate Edges Down to 7.7 Percent as Job Growth Slows: The unemployment rate fell to 7.7 percent in November, its lowest level since December of 2008. However, the immediate cause was a drop of 350,000 in the size of the labor market as reported employment actually fell by 122,000. The establishment survey reported job growth of 146,000. With the prior two months growth revised downward by 49,000, this brings the average over the last three months to 139,000. This is somewhat worse than the 158,000 average rate of job growth over the last year. ...
The household data indicated little change from prior months. While the drop in unemployment is good news, the employment rate actually slipped down to 58.7 percent, just 0.5 percentage points above the 58.2 percent low last reached in the summer of 2011. ...
On the whole, the data in the November report show pretty much the same picture as what we have been seeing over the last six months. The economy is creating jobs at a rate that is a bit faster than what is needed to keep pace with the growth of the labor market. At the current pace, we would not see the economy returning to full employment for another decade. Furthermore, there are more downside risks than upside -- for example, if there were to be severe deficit reduction as a result of the current negotiations between President Obama and Congress.

We need to do better than this. Deficit reduction, however, is the opposite of the right answer to the problem of slow job growth.

    Posted by on Friday, December 7, 2012 at 09:17 AM in Economics, Unemployment | Permalink  Comments (32)


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