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Archive for Saturday, December 5, 2009

Unexpected drop in jobless rate sparks optimism

December 5, 2009

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— Two years of steep job cuts all but ended last month, unexpectedly pulling down the unemployment rate and raising hopes for a lasting economic recovery.

Federal figures released Friday showed that the rate fell from 10.2 percent in October to 10 percent as employers shed the fewest number of jobs since the recession began two years ago. The government also said far fewer jobs were lost in September and October than first reported.

And the so-called underemployment rate, counting part-time workers who want full-time jobs and laid-off workers who have given up their job hunt, also fell, from 17.5 percent in October to 17.2 percent.

The better-than-expected figures provided a rare dose of good news for the economy, but the respite may be temporary. Job creation is still so weak that more than 15 million out-of-work Americans face fierce competition for few openings.

“We will need very substantial job growth to get unemployment lower, especially when the labor force ... starts growing again,” said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank.

Even counting last month’s decline, the unemployment rate has more than doubled from 4.9 percent when the recession began.

The report showed how hard it remains to find work. The number of people jobless for at least six months rose last month to 5.9 million. And the average length of unemployment has risen to more than 28 weeks, the longest on record dating to 1948.

Carolyn Malone of Milwaukee had not looked for work in decades — until she was laid off from her customer-service job in May.

Malone, 62, laughed when asked Friday how many jobs she had applied for. She can’t remember. But she does recall how many landed her an interview: One. It didn’t lead to a job.

“I just want to get my toe in the door,” she said, scrolling through her e-mail at a hiring center.

Still, economists and investors drew hope from Friday’s Labor Department report. Employers sliced just 11,000 jobs in November, compared with a loss of 111,000 jobs in October. It was the best reading since December 2007 — the last time the economy added jobs and the start of the worst recession since the 1930s.

The unemployment rate had not fallen since July, when it declined from 9.5 percent to 9.4 percent.

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