Unemployment Rate Soars to 6 Percent (I thought things were good?)
Friday December 6, 8:55 am ET
By Caren Bohan
WASHINGTON (Reuters) - The U.S. unemployment rate shot up to 6 percent in November and employers hacked their payrolls by the largest amount since February, the government said on Friday, a troubling sign for the economy.
The jobless rate hit its highest level since April, vaulting three-tenths of a percentage point from October's 5.7 percent, according to the Labor Department. Private economists had been braced for an increase in that rate to only 5.8 percent.
The number of workers on U.S. payrolls outside the farm sector tumbled by 40,000 last month, a worrisome showing compared to the 38,000 gain projected by U.S. economists in a Reuters survey.
"It's a very weak report. This is telling you we have a weakening labor market but at the same time yesterday's jobless claims numbers did drop, so the labor market situation remains unclear," said Asha Bangalore, economist at Northern Trust Co. in Chicago.
The bond market rallied on the number, betting that the latest sign of economic weakness would mean that the Federal Reserve will likely keep its federal funds rate at its current 40-year-low of 1.25 percent for a while, or may even cut it again at some point.
In one somewhat positive sign, the government revised up the payrolls figures for both October and September. October payrolls were updated to show a 6,000 rise compared to the previously reported 5,000 drop. Jobs fell by 4,000 in September, a milder drop than the previously reported 13,000 decline.
However, the job market in November showed little sign of any vitality. The average workweek for private-sector employees failed to grow at all, holding at 34.2 hours.
Average hourly earnings grew 0.3 percent to $14.93 after a matching 0.3 percent gain in October.
The downtrodden manufacturing sector shed 45,000 jobs last month. In an indication businesses were remaining cautious in the run-up to the Christmas holiday shopping season, retail jobs sank 39,000. |
