Good news, everyone! According to Friday's report from the Bureau of Labor Statistics, the jobless rate fell to 7 percent, which is a five-year low, and the country created more than 200,000 new jobs.
The Washington Post reported that an estimated 455,000 people joined the job market in November. Hurray!
Markets were even buoyed by the news, with the Dow Jones Industrial Average jumping nearly 200 points. Oh boy!
There are other good-news indicators that suggest that this time, the encouraging numbers may be for real. According to the Post, consumer spending was up 0.3 percent in October; manufacturing output is higher; hourly earnings and the length of the typical workweek are up.
This is just a clean sweep. It’s a very good report. It’s across the board.
- Stuart Hoffman, chief economist for PNC Financial Services Group
But leave it to The New York Times to cast a dour cloud over the whole thing:
“We still need more evidence that the economy is picking up momentum before we ring the victory bell,” said Julia Coronado, chief economist for North America at BNP Paribas. While the unemployment rate, which counts only people actively looking for work, has fallen to 7 percent, from 7.8 percent a year ago, she said that was largely because of people dropping out of the work force.
Moreover, the current level is well above the 5 percent rate that economists consider closer to full employment. At the current rate of job creation, unemployment would fall to 6.4 percent by the end of 2014, and still be around 5.7 percent in late 2015.
Of course, the Times isn't wrong to be wary, reminding us that there were hopeful moments of monthly hiring gains in early 2011 and early 2012 that promptly fizzled.
Plus, the November figure might have been distorted thanks to the government shutdown. Some federal workers who were counted as jobless in October returned to their jobs last month.
And the Times adds that things still remain bleak for some.
For people with less than a high school diploma, for example, the jobless rate last month stood at 10.8 percent. For African-Americans, it was 12.5 percent, or nearly twice what it was for whites.
No improvement was seen in the fate of the long-term unemployed, either, with the ranks of people who have been seeking jobs for more than 27 weeks actually rising slightly in November to 4.06 million. Employers remain wary of workers with long gaps in their résumés, and skills erode the longer people are out of a job.
There's also the fear that this brief joy could officially set off the tapering of the sweet sweet $85 billion a month in stimulus cash that is the federal bond-buying program. In June, Federal Reserve Chairman Ben Bernanke actually suggested that the bond purchases would be gone by the time the jobless rate hit 7 percent. Fortunately for companies who still rely on it, stimulus is still being pumped in apace for the time being.