This morning, the Labor Department announced job creation of 120,000 in the U.S. in November and the unemployment rate has suddenly fallen to 8.6%. Sound like good news? Actually, when we look closer, it’s actually devastating job creation news.
More than half the job creation in November came from retailers and temporary help, as retail companies got ready for the big retail sales push that starts in the U.S. just after Thanksgiving and goes through to Christmas.
The unemployment rate went down to 8.6% not because of U.S. job creation, but because 315,000 people left the labor force. These are people that have either given up looking for work or have gone back to school. The underemployment rate, which does include people that have given up looking for work and people who have part-time jobs but want full-time jobs, is holding at about 16%.
It’s more of the same when you look at November’s job creation numbers: 12,000 construction jobs lost in the U.S. in November, as the U.S. housing market still fails to recover. (Also see: So They Say the U.S. Housing Market is Getting Better? Read This.)
I’m sure we will see many a politician boasting that the jobless rate has fallen to 8.6%, that job creation is happening, and that “we are going in the right direction.” The focus will not be on the hundreds of thousands of people who have given up looking for work in the U.S.