In the middle of negotiations over the “fiscal cliff,” the Obama administration received some good news this week with two jobs reports that indicate a positive trend for the nation’s economic recovery. On Wednesday the ADP National Employment Report was released and indicated the nation gained 118,000 nonfarm private sector jobs over the month in November. Today the U.S. Bureau of Labor Statistics (BLS) monthly Employment Situation Summary was released and the news was equally positive; 146,000 new jobs and unemployment ticking down to 7.7 percent. There is, however, some reason for cautious optimism by the President. November’s jobs numbers are likely positively impacted by seasonal employment and jobs that were created in response to the damage inflicted on the eastern seaboard by Hurricane Sandy.
These numbers represent the first snapshot of the economy after the November presidential election and President Obama’s convincing victory over Republican challenger Mitt Romney in a race that was punctuated by the nation’s economic woes. The reports also land in the middle of the President’s negotiations with House Speaker, Republican John Boehner over a long-term deficit reduction deal that has been defined by President Obama’s insistence that the Bush era tax cuts for wealthy earners be rescinded. In the last week Republicans have signaled a retreat on the tax issue and appear to be angling for a commitment on cuts to domestic spending; specifically social welfare programs. The jobs reports give the President further ammunition in his argument that his vision for an economic recovery is the correct course for the nation.
The unemployment rate for whites was 6.8 percent, for Hispanics 10 percent and for Blacks 13.2 percent. The unemployment rate for Blacks declined over the month. Persistently high Black unemployment has been a source of mounting concern, and some anger, within the African-American community and one of the criticisms aimed at the Obama administration by some in leadership positions in the Black community. Last month the Black unemployment rate was 14.3 percent. Some of the gain in November might be attributable to seasonal hires. The unemployment rate for Black men inched down to 13 percent form 14.1 percent in October and for Black women the rate also declined to 11.4 percent from 12.4 percent the prior month. There was only slight improvement among Black teenagers (age 16 to 19 years) with the unemployment rate in November at 39.4 percent; down from 40.5 percent in November.
The BLS report indicates jobs gains in several industries; including retail trade (53,000), health care (20,000), leisure and hospitality (23,000), wholesale trade (13,000), professional and business services (43,000) and information technology (12,000). The gains in retail are likely the result of seasonal hires for the Christmas shopping season. Health care continued its year-long positive trend, adding an average of 26,000 jobs per month. One troubling note is the loss of construction jobs, declining by 20,000 in November and remaining relatively flat since 2010.
Long-term joblessness continues to plague the unemployed and remains a challenge to the Obama administration. There were 2.5 million persons marginally attached to the labor force. These are individuals who were not in the labor force, but want and are available for work, and had looked for a job during the prior 12 months. These individuals are not counted in the official “unemployment” statistics because they had not searched for work in the 4 weeks preceding the BLS survey of the unemployed. Among these persons are 979,000 “discouraged workers” who are not currently searching for work because they believe there are no jobs available for them.