Jobless Rate Drops 0.3% in November, to 7%; Factories, Construction Firms Create Jobs

WASHINGTON —The U.S. unemployment rate fell by 0.3% in November, to 7%, as factories created 27,000 new jobs and construction firms created 17,000, the Bureau of Labor Statistics said.  Overall, companies claimed to create 203,000 new jobs last month.  Many of them were in high-paying sectors, unlike previous months.

The decline still left 10.91 million people unemployed, 365,000 fewer than the month before, BLS added.  And for the first time in more than a year, more people joined the workforce.  Prior jobless declines came because people had dropped out.

And the unemployed, underemployed, and workers who are so discouraged they stopped looking were 13.2% of the workforce in November, down 0.6% in one month.

But 37.3% of the unemployed, some 4.066 million, have been jobless more than six months.  Of those, 1.3 million face the prospect that federal extended unemployment benefits will end on Dec. 31, leaving them with no income.  Democratic President Barack Obama, organized labor and congressional Democrats want to extend the benefits, but the ruling House GOP adamantly refuses.

The drop in joblessness was “welcome news, but it’s important to keep in mind that we still need nearly 8 million jobs to return to pre-recession health in the labor market,” Economic Policy Institute analyst Elise Gould said.

“The long term unemployment rate is more than double the average rate in 2007,” she added.  “It would be unprecedented for benefits to expire at a time when the long term unemployment rate remains so elevated.  Further, it is bad policy… Unemployment insurance is one of the best economic stimulators.”

Factories gained 27,000 jobs in November, to 12.01 million.  That still left 6.2% of all factory workers (984,000) unemployed.  The big gains were in cars and parts (+6,700) and transportation equipment (+4,900).

Construction added 17,000 jobs in November, to 5.851 million, and almost three-fourths of the gains were at specialty trade contracting firms.  BLS said 8.6% of construction workers (706,000) are still jobless.  Construction union leaders say that understates joblessness in their sector and the real rate is still in double digits.

Service firms claimed to create 152,000 new jobs last month.  There, most were in low-paying sectors such as retail trade (+22,300), bars and restaurants (+17,900), temps (+16,400) and health care (+28,400).  Government added 7,000 jobs, with 8,000 in states and 6,000 in local governments offsetting a 7,000-job federal decline.

-PAI