05 December 2003
The U.S. unemployment rate has fallen slightly to its lowest level in eight months. But employers added fewer jobs in November than had been predicted.
There was modest job growth in November but not nearly as much as had been expected. Fifty-seven thousand new jobs were added, a figure far short of the 150,000 that many experts predicted. Job growth was held back, in part, by a labor dispute in Southern California where grocery store employees have been on strike. Disruptions have led to layoffs in related service industries.
But the unemployment rate still declined, falling from six percent of the work force to 5.9 percent. That is its lowest level in eight months.
The hard pressed U.S. manufacturing sector continued to lose jobs. Industrial employment was down 17,000, the 39th consecutive month of decline.
Financial markets were dismayed with the employment report, interpreting it as a sign that the rapid eight percent economic growth of the third quarter may not be continuing. Stock market averages fell.
John Silvio, of Wachovia Securities, says the jobless report shows that employers are still benefiting from productivity gains and thus not having to substantially increase employment.
"The real key here is that these numbers suggest there are structural issues with the employment data and just the business cycle," he explained. "And that we have really changed the responsiveness of job growth to GDP growth in the American economy."
The economy has finally rebounded strongly from the effects of the 2001 recession. Consumer and business confidence is up. U.S. Treasury Secretary John Snow says the quickly excelerating economy is likely to create two million new jobs over the next 10 months.