The unemployment rate is now at 7.7 percent for the first time in four years, according to a report released Friday by the U.S. Labor Department. The report also describes how the economy created over 146,000 jobs in November.
Economists did not expect such a significant drop in employment, but still insist that the economy needs to show much more growth before they’re happy again. One of the more surprising details for economists, however, was that destruction caused by Hurricane Sandy did not seem to greatly impact the unemployment rate for November.
One of the strongest sectors of growth was the retail industry, which created 53,000 jobs last month, likely due to the busy holiday shopping season. The weakest sectors were construction, which lost 20,000 jobs, and manufacturing (of cars particularly), which lost 7,000 jobs last month -- and will likely be an area of great concern in the coming fiscal cliff negotiations.
While it's certainly good news, economists are quick to point out that the unemployment rate is not a great indication of economic growth. The rate does not take into consideration those who have stopped actively searching for work, which rose last month, or thosewho are underemployed and unable to find sufficient full-time work. Considering these factors, the total unemployment rate only went from 14.4 percent in October to 14.2 percent in November.
Despite the job growth, consumer confidence is much lower now than in November, dropping from an index score of 82.7 to 74.5 according to the Thompson Reuters/University of Michigan’s index of consumer confidence report released Friday.
The upcoming fiscal cliff negotiations may keep job creators and job seekers on edge for December, but the drop in unemployment is a good sign of progress in the slow recovery of the job market.