WASHINGTON — In a surprisingly weak report that conflicts with a host of other more upbeat recent economic data, the Labor Department reported Friday that the unemployment rate jumped to 9.8 percent in November as employers added only 39,000 jobs during the month.
Viewed in isolation, the report might dash holiday cheer and raise new doubts about the strength of the economy’s recovery from the worst downturn in 70 years. However, many analysts were skeptical that the Bureau of Labor Statistics survey was accurate in light of a stream of recent reports showing vitality reviving in retail and auto sales, consumer confidence, manufacturing and even private surveys of job creation.
“This is a very disappointing report. I had expected the report would signal that the recovery was ready to take off. Instead it signals the recovery remains stuck on the tarmac,” said Mark Zandi, the chief economist for forecaster Moody’s Analytics in West Chester, Pa. “I'm a bit suspicious of it, however, given that it is inconsistent with the statistics that have been coming in during the past couple months.”
The BLS said the jobless rate jumped to 9.8 percent after three straight months at 9.6 percent because more people entered the labor force last month and people who'd stopped looking for work resumed doing so.
Mainstream forecasters had expected hiring in November to be well north of 150,000, largely because other measures of employment were positive this week.
On Thursday, the four-week average for first-time jobless claims fell to 431,000, the lowest it had been since September 2008.
The ADP National Employment Report, which measures payroll data, showed Wednesday that 93,000 new private-sector jobs were created in November, 54,000 of them in small businesses, which national surveys often overlook.
The National Federation of Independent Business, which represents small employers, released its monthly survey of members Friday, confirming that positive trend. For the first time in 30 months, its members reported an increase in hiring, albeit only one-tenth of a percentage point.
“Bottom line, job creation was positive. Retail sales and income growth in October and November were strong, promising an even better fourth quarter economy. Bottom line, this means more customers and a reason to hire or rehire workers,” Bill Dunkelberg, the group’s chief economist, wrote in a note.
Friday’s poor numbers were even more striking when measured against a BLS revision that showed employers had added 172,000 jobs in October, not the 151,000 first reported last month. September and October reports were revised upward by a combined 38,000 new jobs.
Earlier this week, a Federal Reserve survey of regional U.S. economies concluded that “the economy continued to improve, on balance,” from early October to mid-November.
Investors shrugged off the November jobs report. The Dow Jones industrial average added more than 350 points earlier in the week.
Still, there was little to cheer in the jobs report.
“We cannot sugarcoat the fact that this is a disappointing employment report. It is still consistent with continued economic recovery and it is out of line with other employment indicators, but there is no sign of the acceleration in growth that we have seen in other reports thus far in the quarter,” forecaster RDQ Economics said in a note to investors.
Other analysts were more sanguine.
“We continue to anticipate gradual improvement in the pace of job growth, with the unemployment rate beginning a sustained, if gradual, downtrend by the end of the first quarter of 2011,” Alan Levenson, the chief economist for the fixed-income division of investment firm T. Rowe Price, said in a note to investors.
The White House used Friday's numbers to prod Congress to extend unemployment benefits, which Republicans are blocking.
“While the overall trend of economic data over the past two months has been encouraging, today’s numbers underscore the importance of extending expiring tax cuts for the middle class and unemployment insurance for those Americans who have lost their jobs,” Austan Goolsbee, the head of the White House Council of Economic Advisers, said in a statement. “Failure to do this would jeopardize hundreds of thousands of additional jobs, and leave millions of Americans, who are out of work through no fault of their own, on their own.”
As of November’s end, 15.1 million Americans were unemployed, 6.3 million of them for longer than six months. No credible analyst sees a substantial dip in the jobless rate _ now higher than 9 percent for 19 months _ anytime soon.
Since last December, the U.S. economy has added an average of 86,000 jobs per month, the Labor Department said. It must add 150,000 jobs per month just to keep pace with newcomers to the work force.
“Unfortunately, we are likely to see unemployment over 9 percent for another year or so. . . . Yet, we seem to be about to discontinue some unemployment benefits and cut government spending, which only reduces demand in the economy,” said Lawrence Mishel, the president of the Economic Policy Institute, a liberal research group.
The BLS report said that the retail sector shed more than 28,000 jobs in November, when employers usually ramp up holiday hiring. Retail sales have been strengthening month by month, and consumer confidence surveys have been showing positive trends.
The manufacturing sector, which also has been showing growth, shed 13,000 jobs in November, BLS reported.
“The decline in manufacturing employment in November was not driven by any one industry, but rather due to the fact that 13 of the 21 major industries posted moderate employment declines while only eight posted moderate increases. This marks the second consecutive month that a majority of manufacturing industries decreased employment,” David Huether, the chief economist of the National Association of Manufacturers, wrote Friday in his blog Shopfloor.org. “After adding 170,000 jobs during the first seven months of the year, manufacturing employment has fallen 56,000 since July.”
Among the few positives Friday, the broad category of professional and business services showed growth of 53,000 jobs. Temporary employment showed nearly 40,000 new jobs.
Temporary hiring is a double-edged sword. Temp hires traditionally reflect employers testing the waters before offering full-time jobs with benefits. Some economists fear, however, that employers are relying more on temp hires, who don’t get benefits such as health care. NOVEMBER BY THE NUMBERS
_ Retail, down 28,100.
_ Trade, transportation and utilities, down 13,000.
_ Manufacturing, down 13,000.
_ Government, down 11,000.
_ Financial services, down 9,000.
_ Construction, down 5,000.
_ Leisure and hospitality, up 11,000.
_ Health care, up 19,000.
_ Temporary help services, up 39,500.
_ Professional and business services, up 53,000. ON THE WEB
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