December 5, 2009
Jobs Report Is Strongest Since the Start of the Recession By LOUIS UCHITELLE <http://topics.nytimes.com/top/reference/timestopics/people/u/louis_uchitelle/index.html?inline=nyt-per> and JAVIER C. HERNANDEZ <http://topics.nytimes.com/top/reference/timestopics/people/h/javier_c_hernandez/index.html?inline=nyt-per> In the strongest jobs report since the recession <http://topics.nytimes.com/top/reference/timestopics/subjects/r/recession_and_depression/index.html?inline=nyt-classifier> began two years ago, the nation's employers all but stopped shedding jobs in November, the government reported on Friday, and they appeared to be on the verge of finally rebuilding the work force. The sudden and unexpected improvement surprised even the most optimistic forecasters. Instead of yet another six-figure job loss, only 11,000 jobs disappeared last month <http://www.bls.gov/news.release/empsit.nr0.htm> and instead of another rise in the unemployment rate, it went down, to 10 percent from 10.2 percent in October. "This is an emphatic demonstration that the economy is moving in the direction of a self-sustaining recovery," said Robert Barbera, chief economist at ITT Investment Technology Group <http://topics.nytimes.com/top/news/business/companies/investment-technology-group-inc/index.html?inline=nyt-org>, who joined many other forecasters in predicting that the work force would be growing again by early spring. The Obama administration was quick to take credit for the improvement, asserting that the $787 billion stimulus package <http://topics.nytimes.com/top/reference/timestopics/subjects/u/united_states_economy/economic_stimulus/index.html?inline=nyt-classifier> had thus far either saved or created a total of 1.6 million jobs. "I think you have to give our interventions a lot of credit," said Jared Bernstein <http://topics.nytimes.com/top/reference/timestopics/people/b/jared_bernstein/index.html?inline=nyt-per>, chief economist for Vice President Biden, arguing in effect that without the stimulus employers would still be shedding workers at a six-digit pace. In Allentown, Pa., President Obama <http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per> called the latest report "another hopeful sign," but expressed a note of caution, saying, "we have a lot more work to do before we can celebrate." Adding to the good news in Friday's report, the Bureau of Labor Statistics <http://topics.nytimes.com/top/reference/timestopics/organizations/b/bureau_of_labor_statistics/index.html?inline=nyt-org> revised the job loss in September and October, shrinking the number by 159,000. That revision overshadowed the small November loss and it made the work force larger by 148,000 jobs than anyone had realized until Friday's announcement. The recession, which started in December 2007 and is by far the longest and most severe since the 1930s, literally shrunk the American work force, driving more than 4 million people not only from their jobs but from even seeking work. As the recovery gathers steam, many of those men and women are likely to return to the labor force, sustaining the unemployment rate until they find work. Indeed, some economists argue that unemployment will come down only slowly, requiring five years or more to fall back to a more or less normal 5 percent. "Assuming we have a strong recovery," said Jan Hatzius, chief domestic economist at Goldman Sachs <http://topics.nytimes.com/top/news/business/companies/goldman_sachs_group_inc/index.html?inline=nyt-org>, "it will take five years to get down to 5 percent." Still, there was reason for optimism. "It is clearly a much better picture, and appears to be mostly genuine," said Nigel Gault, chief domestic economist at IHS Global Insight, who said he was encouraged by gains in the average workweek and the number of temporary workers hired. "It shows employers have come back so much and are starting to rehire." But Allen L. Sinai, the founder of the research firm Decision Economics, said there was also reason for caution, given that 15.4 million Americans still remain unemployed. "It is like a patient after having collapsed with a heart attack sitting up and taking a breath --- nothing more than that," Mr. Sinai said. "Things are getting better, but a one-month respite, frankly, means nothing in the context of the worst labor market ever seen since the 1930s." Still, the November jobs report was more encouraging than most forecasters had expected. Apart from the unexpectedly small number of lost jobs, there was a surge in the hiring of temporary workers and the workweek lengthened, suggesting that thousands of workers on shortened schedules got some or all of their hours restored. Although average hourly pay for most workers rose by only one cent, to $18.74, average weekly earnings rose smartly to $622.17 from $618.09 --- reflecting the increase in hours, which employers coming out of a recession often do before hiring more people. For all the good news, there were dark spots. Despite the drop in the unemployment rate, the percentage of the unemployed who have been out of work for 27 weeks or more rose to 38.3 percent from 35.6 percent in September and October. Nearly six million people have not been able to find work for half a year or more. Once hiring resumes, those workers are likely to be among the last to land jobs. "You create this class of people who essentially become permanently unemployed and can't get back in," Mr. Gault said. "You have people who have lost contact with the labor market, whose skills are not relevant for jobs for the future, who employers regard with skepticism because they have been out of work for so long." In recent months, the economy has shown modest signs of stability in manufacturing and construction --- each a big source of job loss since the recession began in December 2007. Those sectors still posted losses in November, but were offset by gains in health care and temporary agencies. Still, economists worry about the prospects for an energetic recovery with consumer spending tepid even as holiday shopping gets under way. Mr. Obama's trip to Pennsylvania, which was intended to spotlight his administration's efforts to revitalize the economy, came as he is under increasing pressure from Democratic lawmakers to promote job growth. He will present a more detailed plan to create private-sector jobs in a speech on Tuesday. Mr. Obama, who convened a jobs summit <http://www.nytimes.com/2009/12/04/us/politics/04jobs.html?hp> in Washington on Thursday, will essentially call for another round of stimulus efforts, which will require the approval of Congress. In Allentown, the president emphasized that the economy has yet to fully rebound. "Good trends don't pay the rent," Mr. Obama said. "The journey from here will not be without setbacks or struggle. There will be more bumps in the road." Economists generally say that the worst of the recession has passed, and most forecast mild economic growth into next year. But that does not change the economic reality for millions of Americans, who must deal with piles of unpaid bills, worries about unexpected medical expenses and concerns about losing their homes. Kathy M. Henry, 39, who lives in a subsidized apartment on the South Side of Chicago, was laid off from her job as an administrative assistant at an advertising agency two years ago. Since then, she says, she has applied for more than 500 jobs. She has received a $1,200 monthly unemployment check since August of last year, which she describes as not enough to support herself and two of her children who live with her. "It's a constant cycle," she said. "I've applied everywhere, from big corporations to minute corporations, and I don't even get an e-mail back. I'm worried people see me as old and out of touch and decrepit." Earlier this week, Ms. Henry's son, a high school senior, came home with a packet of class photographs. The $40 cost was beyond her means, she said, so she decided against purchasing a memento of her son's senior year. In Canada on Friday, the government reported that the country's economy added more jobs than expected in November, erasing the losses in October. Statistics Canada reported a net employment gain of 79,000 in November, topping expectations of a 15,000 gain. The unemployment rate fell to 8.5 percent from 8.6 percent in October. Jeff Zeleny and Sheryl Gay Stolberg contributed reporting. 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