Employment report disappoints experts
By Peter G. Gosselin
Los Angeles Times
WASHINGTON — American employers hired 57,000 workers in November, well short of expectations.
The Labor Department said yesterday that the increase — which extended the nation's run of job gains to four months — helped trim the jobless rate a tenth of a point to an eight-month-low 5.9 percent.
But the number of people hired was barely one-third what analysts had been predicting. That re-ignited debate over President's Bush's handling of the economy and revived worries that a wedge has been driven between economic growth and job growth.
The president sought to look past the details of the jobs report in an appearance yesterday in Maryland, choosing to focus on the generally positive bent of recent trends and to trace the improvement to his tax cuts.
"The unemployment rate dropped. ... More workers are going to work. ... We're a strong country, a strong economy," Bush told workers at a suburban Home Depot.
At least one of Bush's Democratic challengers would have none of it. "While President Bush is celebrating, someone should remind him that 8.7 million Americans" are unemployed, said Sen. John Edwards, D-N.C.
Economists did find silver linings in the November job numbers. New hiring, although modest, was pretty much across-the-board, suggesting that the economy as a whole is on the mend. The battered manufacturing sector shed only 17,000 jobs, a big improvement over 100,000-a-month losses of a few years ago.
Analysts traced part of the weak jobs showing to the California grocery strike and lockout, which trimmed at least 23,000 employees from U.S. payrolls who ordinarily would be working. But even if these workers were added back in, the November gains would still be only half the 150,000-plus that most economists had expected.
All in all, the latest report was, in the words of John Hancock Financial Services economist Bill Cheney, "like getting just the Christmas present you wanted, but two sizes too small."
Next week, Congress is scheduled to return to Washington to take up unfinished spending measures and is likely to come under mounting pressure to renew a soon-to-expire extended unemployment benefits program.
Advocates said the case for renewing the federal benefits program was strengthened by the November statistics, which show that the fraction of the nation's unemployed out of work six months or more hit a 20-year high of 23.7 percent. The program, originally passed in March 2002 and twice renewed, gives workers who run through their regular six months of jobless benefits another 13 weeks of coverage. Absent congressional action, the program will begin shutting down Dec. 21.
"With long-term unemployment at a 20-year high, President Bush and the Republican Caucus have no excuse whatsoever for refusing to grant unemployment benefits for the long-term unemployed," said Sen. Edward M. Kennedy, D-Mass, a longtime advocate of jobless benefits.
Analysts said the comparatively weak jobs numbers would have a subtle effect on Federal Reserve policy-makers, who meet next week to decide whether to maintain key interest rates at four-decade lows.
As one economic statistic after another came in stronger than expected in recent months, the central bank has been under rising pressure to begin raising interest rates to keep the economy from overheating and rekindling inflation. The economy grew at a two-decade high 8.2 percent annual rate last quarter.
But with yesterday's numbers showing the nation's labor market has yet to snap back, that pressure is apt to dissipate.
The economy needs to create somewhere between 125,000 and 150,000 new jobs a month to keep pace with a growing population and labor force. It has to create even more jobs to produce steady declines in unemployment.
While the overall unemployment rate slipped in November to 5.9 percent, the rate for blacks fell a full 1.3 percentage points to 10.2 percent. By contrast, the rate for Latinos climbed 0.2 point to 7.4.
In what some analysts took as a sign of improvement, employers nudged up the average workweek by a tenth of an hour to 33.9 hours and the manufacturing workweek by two-tenths of an hour to 40.8 hours.
Companies usually increase the hours of their existing workers before making new hires.
