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Unemployment rate falls to lowest level since March 2009

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The U.S. unemployment rate fell last month to its lowest level in more than 2-1/2 years as more of the unemployed either found jobs or gave up looking and were no longer counted as jobless.

The Labor Department said Friday that the unemployment rate dropped sharply, to 8.6 percent, down from 9 percent in October. The rate hasn't been that low since March 2009, during the depths of the recession.

About 13.3 million Americans remain unemployed.

Employers added 120,000 jobs last month. And the previous two months were revised up to show that 72,000 more jobs were added — the fourth straight month that the government has revised prior months higher.

Private employers added a net gain of 140,000 jobs in November. But governments shed 20,000 jobs, mostly at the local and state level. Governments at all levels have shed nearly a half-million jobs in the past year.

More than half the jobs added last month were by retailers, restaurants and bars, a sign that holiday hiring has kicked in. Retailers added 50,000, the sector's biggest gain since April. Restaurants and bars hired 33,000 workers. The health care industry added 17,000.

Even with the recent gains, the economy isn't anywhere close to replacing the jobs lost in the recession. Employers began shedding workers in February 2008 and cut nearly 8.7 million jobs for the next 25 months. Since then, the economy has regained nearly 2.5 million of those jobs.

The presidential election is less than a year away, which means President Barack Obama will almost certainly face voters with the highest unemployment rate of any president since World War II. Still, if the rate continues to decline, Obama stands to benefit.

And Europe's financial crisis threatens to slow U.S. growth next year. A recession in Europe could reduce U.S. exports, hurt global financial markets and dampen business confidence.

Paul Ashworth, an economist at Capital Economics, estimates that the economy will expand 2.5 percent in the last three months of this year. But he expects growth to slow to 1.5 percent in 2012, partly because of the crisis in Europe. And if Congress fails to extend the Social Security tax cut and long-term unemployment benefits this month, growth is likely to slow even further.

Weak job growth means companies don't have to raise pay to keep their employees. Fewer jobs and lower pay leaves consumers with less money to spend. That's holding back economic growth.

In the past three months, the economy has added an average of 143,000 net jobs per month. That's enough to keep up with population growth and better than the previous three months, when the economy averaged just 84,000.

Other recent economic reports have been positive, too.

Factory output expanded last month. Retailers reported a strong start to holiday sales over the Thanksgiving weekend, consumer confidence surged in November to the highest level since July, and Americans' pay rose in October by the most in seven months.

Car sales also rose sharply in November, normally a lackluster month for the auto industry. Chrysler, Ford, Nissan and Hyundai all reported double-digit gains on Thursday, compared to a year ago.

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  • I have heard several Republicans say--on TV
    That they want to keep it this way and they will do whatever they can to keep the economy as it is.

    Why? Their main goal is not the people, but to get rid of Obama. They actually said this!
  • Commerce Department
    Damned if you do and damned if you don't...many Republican's want to do away with the Commerce Department. China's government must be evolved...oh the shame of it!
  • The movement matters, not the numbers.
    It doesn't matter how the numbers are calculated. The system we have used in our country for decades does not count people who are no longer seeking employment. That is not a big deal. What matters is the relative movement of the numbers as long as they are calculated consistently. These economic indicators show direction and magnitude of change, the starting point is merely ancillary to that end.

    This data shows that in the past three months substantially more jobs were added than in the previous three months. That is about it. We are moving in the right direction. If it showed the opposite it would mean that we are moving in the wrong direction.

    It doesn't matter if we count people who are not looking for jobs because we have never counted people who are not looking for jobs. The data set is limited so that it will remain accurate over time, allowing us to compare different points over the years. Does it tell the whole story? No. And it doesn't purport to.
  • How is this calculated?
    Does it only count people who are actually collecting unemployment benefits? If so, it's not necessarily just people giving up that deflates the numbers, but also people running out of benefits, but still searching.
  • Deceptive numbers
    The "unemployment" rate is down, but it's only because 300,000 people gave up. The reality is worse than ever.

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