In a positive sign for President Barack Obama, the unemployment rate surprisingly dropped to 8.6 percent in November - the lowest rate in two-and-a-half years - as the country?s economy flashed signs of strength amid uneasiness about a broader global downturn.
The big dip in the unemployment rate from 9 percent in October occurred even though the Labor Department reported Friday that just 120,000 jobs were added in November, a figure roughly in line with expectations.
Continue ReadingUnemployment now stands at its lowest level since March 2009 - a clear political plus for Obama but something of a mixed bag considering that 13.3 million Americans are still jobless and the sovereign debt crisis unfolding in Europe could tip the world into a recession.
The report indicates both greater economic momentum in recent months and a pessimistic withdrawal from the workforce by many coping with long-term unemployment.
The jobless rate tumbled in part because about 315,000 people have stopped hunting for work and are no longer considered unemployed. As a result, the labor force participation rate fell from 64.2 percent to 64 percent.
In addition, upward revisions made by the Labor Department to past months on Friday show that an additional 92,000 jobs were added in October and September, suggesting the economy was much stronger than initially believed.
Private companies drove the growth with a net gain of 140,000 jobs last month. Layoffs by state and local governments continued to be a drag, as the public sector shed 20,000 jobs.
The holiday season boosted hiring, with more than half of the new jobs coming from retailers, restaurants and bars. In anticipation of Black Friday shopping, stores brought on 50,000 new workers. Restaurants and bars contributed another 33,000. Health care also accounted for 17,000 new jobs.
Mark Zandi, chief economist of Moody?s Analytics, cautioned Friday morning that the news was ?good, but not as good as the decline would suggest.?
?The decline also occurred because fewer people were out there looking for work. That?s not a good sign,? he said on MSNBC. ?I?ll take it, but it?s not as good as it looks.?
The drop in unemployment did not stop the GOP offensive against the Obama administration?s economic policies.
?It?s very good news, obviously, going into the holiday season,? said Republican presidential contender Mitt Romney told the TV show ?Fox & Friends.? ?People are shopping again. It?s very good news that the unemployment rate is down, people are going back to work, but look overall the president?s record on the economy ? it?s been miserable.?
House Speaker John Boehner (R-Ohio) said more work remained to be done to lower the rate.
?Any job creation is welcome news, but the jobless rate in this country is still unacceptable,? he said in a statement. ?Today marks the 34th consecutive month of unemployment above eight percent. As you may remember, the Obama administration promised unemployment would stay below eight percent if its ?stimulus? was enacted. That promise has gone unfulfilled.?
House Majority Leader Eric Cantor (R-Va.) was nonplussed by the drop, saying the possibility of tax hikes has held back the recovery.
?During the holidays, it?s always comforting to see an uptick in seasonal hiring, but far too many people still remain out of work and the economy still faces systemic problems,? he said in a statement. ?Unemployment has remained high and economic uncertainty has prevailed because of the constant threat of tax increases from Washington Democrats and the Obama Administration.?
Tim Mak and M.J. Lee contributed to this report.
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