WASHINGTON – The U.S. economy added a solid 146,000 jobs in November and the unemployment rate fell to 7.7 percent, the lowest since December 2008. The government said Superstorm Sandy had only a minimal effect on the figures.
In advance of the national jobs report, The Wall Street Journal today focused on Fort Wayne for some insight into the continuing persistence of higher unemployment rates.
A story headlined “A Jobless Dilemma: What's Wrong with Fort Wayne” pointed out that unemployment here is 6.8 percent, well below the national average, but many jobs are going unfilled.
The Journal story looked at two ends of the problem: Employers who can't find enough workers for relatively high-paying jobs calling for high skills and low-paying jobs that require few skills.
The Journal looked at C&A Tool Engineering and Fort Wayne Metals, high-precision manufacturers, and Sweetwater Sound, the national audio-gear retailer whose sales positions require both technical knowledge and strong communications savvy. The manufacturers reported that they have trouble finding enough capable workers. Making matters worse for manufacturers, young people aren't pursuing the kind of training they need for those jobs.
Jerrilee Mosier, chancellor of Ivy Tech's Fort Wayne campus, told the Journal that parents disillusioned by their own experiences as manufacturing employees aren't encouraging their children to work in that field.
At Sweetwater, too many applicants fall far short of the skills they need to communicate effectively. An example: Job applications filled with text-message abbreviations and smiley faces.
Among the low-skilled jobs that go unfilled, The Journal offered the example of classroom aides, part-time jobs without benefits that pay $8.65-$11.79 per hour and go unfilled, even though they require little beyond a high-school diploma, a clean drug test and a steady work history.
In the national jobs report, the Labor Department offered a mixed picture for the economy.
Hiring remained steady during the storm and in the face of looming tax increases. But the government said employers added 49,000 fewer jobs in October and September than initially estimated. And the unemployment rate fell from 7.9 percent in October mostly because more people stopped looking for work and weren't counted as unemployed.
The report "is something of a mixed bag but, on balance, it's a positive," said Paul Ashworth, an economist at Capital Economics.
Sandy's effect on the figures was much smaller many analysts had predicted. The government noted that as long as employees worked at least one day during a pay period – two weeks for most people – its survey would have counted them as employed.
Still, there were signs that the storm disrupted economic activity. Construction employment dropped 20,000. And weather prevented 369,000 people from getting to work – the most for any month in nearly two years. These workers were still counted as employed.
Stock futures jumped after the report. Dow Jones industrial average futures were down 20 points in the minutes before the report came out at 8:30 a.m., and just afterward were up 70 points.
As money shifted into stocks, it moved out of safer bonds. The yield on the benchmark 10-year U.S. Treasury note, which moves opposite the price, rose to 1.63 percent from 1.58 percent just before the report was released.
Since July, the economy has added an average of 158,000 jobs a month. That's a modest pickup from 146,000 average in the first six months of the year.
The job growth suggests that most employers aren't yet delaying hiring because of the "fiscal cliff." That's the combination of sharp tax increases and spending cuts set to take effect next year unless the White House and Congress reach a budget deal before then.
There is "no obvious impact from the looming fiscal cliff yet," Ashworth added, "but it could still have a greater effect on December's figures."
Last month, retailers added 53,000 positions. Temporary help companies added 18,000 and education and health care also gained 18,000.
Auto manufacturers added nearly 10,000 jobs.
Still, overall manufacturing jobs fell 7,000. That was pushed down by a loss of 12,000 jobs in food manufacturing that likely reflects the layoff of workers at Hostess.
Sandy forced restaurants, retailers and other businesses to close in late October and early November in 24 states, particularly in the Northeast.
The U.S. grew at a solid 2.7 percent annual rate in the July-September quarter. But many economists say growth is slowing to a 1.5 percent rate in the October-December quarter, largely because of the storm and threat of the fiscal cliff. That's not enough growth to lower the unemployment rate.
The storm held back consumer spending and income, which drive economic growth. Consumer spending declined in October and work interruptions caused by Sandy reduced wages and salaries that month by about $18 billion at an annual rate, the government said.
Still, many say economic growth could accelerate next year if the fiscal cliff is avoided. The economy is also expected to get a boost from efforts to rebuild in the Northeast after the storm.