President Barack Obama's sigh of relief must have blown the petals off flowers in the White House Rose Garden.
After hovering above the 9 per cent mark for most of 2011, the United States' unemployment rate finally dropped to 8.6 per cent for November, representing a silver lining in an otherwise difficult economy.
In its monthly report, the Bureau of Labour Statistics (BLS) noted that nonfarm payroll employment rose by 120,000 and employment continued to trend up in retail trade, leisure and hospitality, professional and business services, and healthcare.
The Obama administration welcomed the news even as the media has been swamped with bad news stories on the economic front, including this week's downgrade of major U.S. banks' credit rating by Standard & Poor's and a bankruptcy filing by American Airlines. Yet the positive employment trend in the private sector appeared to be partially offset by government employment, which continued to trend down, the BLS said.
Alan Krueger, Chairman of the Council of Economic Advisers, struck a note of cautious optimism when he said, “Today's employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression, but the pace of improvement is still not fast enough given the large job losses from the recession that began in December 2007.”
While November's unemployment rate was the lowest since March 2009, Mr. Krueger pointed out that about half of the drop in unemployment, or 315,000 individuals, in the household survey was due to a decline in the labour force and about half, that is 278,000 individuals, was due to employment growth.
“Despite adverse shocks that have created headwinds for economic growth, the economy has added private sector jobs for 21 straight months, for a total of 2.9 million jobs over that period,” Mr. Krueger said, adding, “Nonetheless, we need faster growth to put more Americans back to work.”
He also pointed out that while the U.S. economy was healing, the world economy continued to be in a “fragile state” and all economies are linked through trade and finance. In this environment, Mr. Obama's American Jobs Act is the right medicine to sustain and strengthen the recovery, Mr. Krueger noted, underscoring the fact that 13.3 million Americans were still unemployed, and 43 per cent of them unemployed for six months or longer.
In November, the key sectors with employment increases included retail trade (+50,000), professional and business services (+33,000), leisure and hospitality (+22,000), healthcare and social assistance (+19,000), and manufacturing (+2,000). Sectors with employment declines included government (-20,000) and construction (-12,000).
State and local governments lost 16,000 jobs and have shed 430,000 jobs since February 2010, possibly reflecting the high pressure emanating from drastic budget cuts that they have faced over the last few years.