Handing job seekers and the Obama administration a huge setback, the government said Friday that the nation’s employment picture was far more bleak than expected last month.
The Labor Department said nonfarm payrolls edged up by just 39,000 in November, compared with expectations of an increase of 140,000 from economists.
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The unemployment rate jumped to 9.8% from 9.6%.
It was a universally weak report. The average workweek came in at 34.3 hours, unchanged from October, and average hourly earnings crept up by just a penny, to $22.75. The private sector created just 50,000 jobs, and the US unemployment rate has now been above 9% for 19 months.
The numbers were particularly disheartening in the context of recent data that suggested the US economy - indeed, the world economy - was showing some life. Recent data on manufacturing and consumer confidence bolstered the bullish case the stock market has been making of late. A private reading on the state of the employment market earlier this week showed robust hiring, paving the way for higher expectations for today’s number.
Stock-market futures reversed sharply on the news; futures on the Dow Jones Industrial Average went from a gain of about 30 points to down 43.
Friday’s disappointing report will further pressure another ailing segment of the economy: housing. In the absence of growing employment there is not likely to be much improvement in the real estate market, an area of the economy that continues to struggle.
While US households have spent the last couple of years whittling away at their debt, the failure of home prices to rebound continues to strain homeowners. Meanwhile, would-be buyers are not yet ready to commit to a shaky real estate market.
The numbers Friday will no doubt further stimulate the debate surrounding the Federal Reserve’s recent decision to buy another $600 billion in Treasurys, the so-called QE2 program. Many on Wall Street were arguing that the controversial program wasn’t necessary, pointing to, among other things, the recent strength in the economy. Today’s jobs report may bolster the Fed’s argument that the program was necessary.