The unemployment rate fell to 8.6 percent, after having been stuck around 9 percent for most of 2011, the Labor Department said Friday. Additionally, a separate government survey found that the nation’s employers added 120,000 jobs last month, after adding 100,000 jobs in October.
These numbers were not particularly impressive by historical standards — they were just about high enough to keep up with population growth — but employment in the previous two months was revised upward substantially, too.
“If you go back to August, all sorts of people were telling us that the economy was headed straight into recession,” said Paul Ashworth, senior United States economist at Capital Economics. “Since that point, we’ve become more and more worried about the euro zone and other areas of the global economy, but somehow, at least for the moment, the U.S. economy seems to be shrugging all that off.” Still, concerns remain about the economy’s ability to withstand these international dangers.
The jobless rate fell partly because more workers got jobs, but also because about 315,000 workers dropped out of the labor force, and the jobless rate counts only people who are actively looking for work. Even so, the country still has a backlog of more than 13 million unemployed workers, whose periods of unemployment averaged an all-time high of 40.9 weeks.
“They say businesses are refusing to look at résumés from the unemployed,” said Esther Perry, 59, of Bedford, Mass., who participated in a recent report on unemployed workers put together by USAction, a liberal coalition. “What do you think my chances are? Once unemployment runs out, I don’t know what I will do.”
The continued fragility of the economy underscores just how much President Obama needs additional stimulus, a tidy and fast resolution to the European debt crisis or some other breakthrough to reinvigorate the job market before the 2012 presidential election.
On the issue of government action to stimulate the economy, there has been some movement in Washington toward extending the payroll tax cut, which is currently scheduled to expire at the end of this month. Economists have said that allowing the expiration of the tax cut — which lets more than 160 million mostly middle-class Americans keep two percentage points more of their pay checks — could be a severe drag on both job creation and output growth.
“If isn’t extended, it will have an impact on consumer spending in the first half of next year because it’ll put a big dent in consumer income,” said Conrad DeQuadros, senior economist at RDQ Economics. “To the extent that reduces spending, there will be second-round effects on hiring.”
The other major stimulus program scheduled to expire by 2012 is the extended unemployment insurance benefits, which allow some jobless workers to continue receiving benefits for as long as 99 weeks. Already, millions of workers have exhausted their benefits, and ending extended benefits is likely to affect another sizable chunk of the unemployed.
“In January alone, 1.8 million workers who currently receive federal unemployment insurance or would have begun to receive it will be cut off if Congress does not renew the program,” according to a recent report from the National Employment Law Project.
Unemployment benefits are believed to have one of the most stimulative effects on the economy, since recipients of these benefits are likely to spend all of the money they receive quickly and so pump more spending through the economy.
Article source: http://feeds.nytimes.com/click.phdo?i=cc9db1f61f6cf275ba25161498431303
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