Susan Luzzaro 6:30 p.m., July 31
So-Called Recovery Sputters. Unemployment Rises, Jobs Barely Up
Those expecting the national economy to spurt ahead were disappointed by today's (Dec. 3) employment news from Washington DC. Employment in November grew by only 39,000; economists had expected a gain of 155,000. The unemployment rate jumped to 9.8% from 9.6% in October. Economists had expected the rate to be steady. Retail jobs dropped 28,100 in the month; economists had seen signs of a retail revival. Manufacturing jobs declined 13,000 and construction jobs dropped 5,000. There are now 15.1 million unemployed persons, and almost 42% have been jobless for 27 weeks or more. Underemployment, which includes discouraged workers and those forced to work part-time because of the weak economy, held steady at 17%. The average workweek was steady at 34.3 hours. Unemployment and underemployment are likely to remain painfully high for years.
Early in the trading day, stocks are only moderately down. However, stock performance is not particularly related to the health of the economy. Since early in 2009, the stock market has been sensitive to the massive amount of liquidity pumped into economy by central banks, particularly the U.S. Federal Reserve. Today's bad news suggests the Federal Reserve will continue to pump money into the economy by buying bonds, and possibly even step up that program, which is criticized strongly by overseas allies who correctly say the U.S. is trying to drive its currency down while simultaneously slamming other countries for doing so.