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Unemployment Drops Sharply to 8.6%, Lowest Since March 2009, But Labor Pool Shrinks

| December 2, 2011

Click on the graph for larger view. (© FlaglerLive)

The national unemployment rate fell to 8.6 percent in October, its lowest level since March 2009, and the economy added 430,000 jobs in the last three months, including 120,000 in October, brightening what until now had been anemic prospects for a sustained recovery.

There were 594,000 fewer people on the unemployment rolls in November, reducing the total number of unemployed Americans to 13.3 million. September and October job creation figures were revised upward, adding 72,000 jobs.

But–and there’s always been a but with economic figures since the 2008 recession–the lower unemployment rate was helped in part by a drop in the number of people in the labor force. A year ago, 84.9 million people were not in the labor force. That number has risen to 82.2 million, while the labor force has shrunk by about 300,000. That reduction is driven by a number of factors, including unemployment benefits running out and, in many states–including Florida–more stringent requirements for unemployed people to collect benefits. When people are no longer collecting unemployment, they’re no longer counted in the official unemployment rate, even though they remain, in effect, jobless. Another continuing drag: those who are officially unemployed are spending an average of almost 41 weeks without work, an all-time high.

Most people don’t necessarily look past the bottom line, however. Politically and psychologically, the sharp drop in the unemployment rate, if it is sustained in coming months, will improve President Obama’s re-election prospects while deflating his opponents’ arguments that the economy has been immovably mired in a rut.

Indicators point to particular strength in small-business hiring, and hiring that’s been sticking.

Those suffering most from unemployment are teenagers from 16 to 19 years old (23.7 percent), blacks (15.5 percent) and Hispanics (11.4 percent). Asians have the lowest unemployment rate, at 6.5 percent, followed by whites, at 7.6 percent.

Some job-sector highlights:

Employment in retail trade rose by 50,000 in November, with much of the increase occurring in clothing and clothing accessories stores and in electronics and appliance stores. Employment in leisure and hospitality, relevant to Flagler’s tourism industry, continued to trend up in November, with 22,000 new jobs. Leisure and hospitality sectors added 253,000 jobs in the last 12 months. Employment in professional and business services was up 33,000, mostly through temp jobs. Health care employment continued to rise (17,000 new jobs, 9,000 of those in hospitals). Manufacturing employment was flat, as it has been since July. So was construction employment.

In the loss column, government jobs government employment continued to fall, led by a 5,000-job decline in the U.S. Postal Service.

The average workweek for all employees on private payrolls was unchanged at 34.3 hours in November. The manufacturing workweek was down by 0.2 hour to 40.3 hours, offsetting a 0.2 hour gain in the previous month. Average hourly earnings for all employees on private nonfarm payrolls decreased in November by 2 cents, or 0.1 percent, to $23.18. This decline followed a gain of 7 cents in October. Over the past 12 months, average hourly earnings have increased by 1.8 percent, not enough to improve on inflation.

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20 Responses for “Unemployment Drops Sharply to 8.6%, Lowest Since March 2009, But Labor Pool Shrinks”

  1. The Truth says:

    I wonder what the Republican’s will say to this? Unemployment goes up and they blame Obama, unemployment goes down and they claim it’s because of the season. There is so much negativity in this country I have a hard time believing we will ever get better.

  2. Devrie says:

    Isn’t this the time of year when the unemployment extension was shot down? It’s been about a year now. Also, I think a lot of people are getting out of here!

  3. Yellowstone says:

    Where did this chart/graph originate/ i’ve looked at the DoL’s website and found a table that refutes the data this chart.

    Just curious . . Perhaps this a chart/graph for Florida?


  4. Doug Chozianin says:

    The Obama Administration is cooking the books! The .4% drop in unemployment is baloney!

    Let’s do the math…

    If employing 120,000 people drops the unemploytment rate by .4%, that means for every 30,000 people hired, the unemployment percentage drops.1%

    To get unemployment down to 0%, we need to hire 3,930,000 (30,000 * 131) people. Wait a minute…

    WE HAVE 13.3 MILLION UNEMPLOYED!!! What’s going on??? What happened to 9,370,000 (13,300,000 – 3,930,000) unemployed people??? The numbers don’t compute!!!

    QED… The Obama Administration is not telling the truth.

  5. Robert says:


    You can bet your last money that one of these bright bulbs in congress will say that the tax breaks for the wealthy is why unemployment has gone down.

    That is termed a mortal lock.

    It has nothing to do with anything that the majority of congress has done, because they are spending their time and effort making sure that the president is a one term president.

  6. Kip Durocher says:

    @ Doug

    I agree there seems to be quite a lot of “cooking the books” goint on today, know what I mean?
    It is hard to get people like the conservative republican men to “tell the truth.”

    But at least Obama has books to cook. The repuglicans just spent and did not even keep books.
    Since they had no intent to find a way to pay for their excesses there was no need to keep books.

    “Hey Scooter, ship a plane load of pallets of 100 dollar bills over to Haliburton”

  7. Johnny Taxpayer says:

    The books aren’t really being cooked any differently than they’ve always been(although how the unemployment rate is calculated has been changed since this admin took over)… but the reporting is different. The unemployment rate is down so much for one reason and one reason only, the number of people claiming unemployment has dropped. The addition of 120k jobs, while a good thing, would barely impact the unemployment rate. But several hundred more thousand dropping off the rolls, and thus falling outside the labor departments definition of unemployed does.

    The main difference now is how it is reported by the media. Back when Bush was President, (back when the unemployment rate was below 5%!) when this happened the headlines were “More people giving up searching for work”. Now that Obama is President the headlines are “120k jobs added, unemployment rate drops”.

  8. The Truth says:

    And so it begins.. here’s someone claiming that Obama is “cooking” the books. This is more Fox News propaganda and quite frankly, it’s tired and old.

    Adding 120,000 jobs is nothing to write home about, but it is an improvement. Is it partly due to the seasonal jobs that are added at this time of year? I’m sure that has to do with it. I agree with others, this definitely is nothing to do with what our “congress” is doing. They’re too busy working to not agree with anything our President presents to them because they have their political agenda to follow.

    • Layla says:

      Here’s a little reality propaganda for you. More and more states, including Florida, have now passed new regulations that you must demonstrate FIVE JOB INTERVIEWS per week in order to apply.

      With no employers, how in the hell are you supposed to get 5 interviews?

      These figures are cooked. We will know when the economy is back because we will all be working again.

    • lisa says:

      Christmas help

  9. some guy says:

    @Doug In your mat you left out the #s for those who are still without a JOB but are not counted by the FEDS

  10. Layla says:

    Robert, which majority are you talking about? The Republicans in the House or the Democrats in the Senate?

  11. dealingwithidiots1 says:

    0.04 % is not SHARPLY…and wait till January when it returns to 9% after the seasonal workers are let go.

  12. Gia says:

    With a congress do nothing, do not expect anything done. Always excuses. After January l’unemployment goes up anyway. The US B’ S’ will go on for another year or two, at least.

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