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Unemployment rate falls to 7% on strong jobs report

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The Bureau of Labor Statistics (BLS) released the official jobs report Friday and it had good news. The unemployment rate has fallen to 7%--a five-year low. According to BLS, a net of 203,000 jobs were added in November. Furloughed federal employees returned to work reducing the total number of un-employed persons.

The civilian workforce rose by 455,000 in November after a declined of 720,000 in October. Total employment increased by 818,000 last month, following a decline of 735,000 in October. According to BLS, 196,000 private sector jobs were added, fewer than the 215,000 ADP reported Wednesday. Much of that difference is in methodology.

On top of the November gains, the BLS adjusted previous estimates for September and October that resulted in an additional 8,000 jobs. September’s number went up from the 163,000 reported at the time to 175,000. October’s numbers fell by 4,000.

Other good news in the report was that the number of persons working part time because their hours were cut decreased by 330,000 in November to 7.7 million.

In November there were 762,000 discouraged workers, down by 217,000 from a year ago. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million had not searched for work for reasons such as school attendance or family responsibilities.

Even though furloughed federal workers had returned to work, the total number of federal employees declined by 10,700 jobs again in November including 3,700 laid off postal workers. Despite political clap-trap about an “exploding” federal government, the number of federal workers has declined nearly every month during the last five years.

State governments, however, added 8,000 employees and local governments hired 6,000 more workers. What we continue to see as a result of congressional budget policies is a shift of the burden from federal taxpayers to state and local taxpayers.

There were big gains in manufacturing, which added 27,000—17,000 of those were making durable goods. Construction added 17,000 new jobs and most of these were higher paid specialty trades like plumbers and electricians.

The service sector, however, still accounted for the most jobs adding 152,000. Transportation and warehousing added 31,000 jobs with gains in couriers and messengers truck transportation, warehousing and storage, and air transportation.

Health care employment continued to increase over the month adding 28,000 jobs. Job gains occurred in home healthcare services and offices of physicians. Nursing care facilities lost 4,000 jobs. Job growth in health care has averaged 19,000 per month thus far this year, compared with an average monthly gain of 27,000 in 2012.
This debunks false claims by certain politicians that Obamacare is killing jobs in the health sector and that physicians are going out of business.

In November, employment in professional and business services went up by 35,000. Over the last 12 months, the industry added an average of 55,000 jobs per month. Retail trade employment also continued to expand in November with gains of 22,000. Job growth occurred in general merchandise stores, sporting goods, hobby stores, book, and music stores. Automobile dealers hired 7,000 workers. Over the prior 12 months, job growth in retail trade averaged 31,000 per month.

Leisure and hospitality, and food and drinking places added 18,000 workers in November. Job growth in this industry averaged 28,000 per month over the prior 12 months.

The jobs report is good news for Americans, and the Obama administration. It affirms that the economy is continuing to recover. On top of this the quarterly survey of CEOs of large corporations indicated most intended to hire workers over the next few months. Republicans are blasting the report saying it proves Obama's policies are failing.

The only dark spot in this report is that the number of long term employed continues to be too high. President Obama said Wednesday that he would be putting forth a proposal to deal with that. Of course, any proposal will need to be something he can do without relying on the do-nothing Congress.

Let’s hope this good news encourages consumers to spend this holiday season. The stock market opened with double digit gains on the news. Hopefully investors will cut loose with some of that cash. Then if the minimum wage goes up, we might begin to see real economic growth next year. That is a big “if” unfortunately. Scrooge is alive and well.

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