Despite Better Than Expected US Job Gains
December 07, 2012
Despite better than expected job growth in November, analysts say the US
economy is far from healthy. U.S. companies added 146 thousand jobs in
November and the unemployment rate fell two tenths of a percent to 7.7 -
the lowest since December 2008. The better than expected job numbers,
however, don't tell the whole story.
Despite wreaking havoc in the Northeast states and devastating hundreds
of businesses, Hurricane Sandy's impact on jobs appears to have been
minimal. The Bureau of Labor Statistics says U.S. companies hired more
workers than expected in November, sending the nation's unemployment
rate to a four-year low.
But Yahoo Finance expert Aaron Task said the rate fell for the wrong
"A lot of people dropped out of the labor force. That's why the
unemployment rate went down, not because 146,000 jobs were added. You
had over 300,000 people who essentially gave up looking for jobs," said
Others say unemployment is becoming chronic. Although the economy has
been recovering for three years, labor market economist Heidi Shierholz
said the job market is still in crisis mode.
"Over the last year, we have seen some real improvement but it's been so
modest and the hole we have to dig out of is so steep that we literally
have a gap in the labor market of around nine million jobs," said
economist Heidi Shierholz.
Instead of focusing on how many Americans are out of work, Chuck Vollmer
- a blogger and author of the book "Jobenomics" - said U.S. policy must
address ways to expand the current workforce, estimated at more than 100
"People tend to look at the unemployment numbers. What I'm saying, let's
look at the employment numbers, let's look at this bottom group here,
the 122 or the 102 million and let's grow it to 122 million," said
To do that, Vollmer said U.S. policy needs to be more supportive of
a bigger economic threat may be looming by year's end.
At a Senate hearing Thursday,
economist Mark Zandi warned that political dysfunction and the inability
of Washington lawmakers to deal with coming
tax hikes and budget cuts - the so called fiscal cliff - could lead to a
loss in business confidence.
"It hasn't affected hiring and layoff decisions yet, but it will if we
get into next year and we get into February and we haven't nailed this
down, the economy and investors will bail and the economy will begin to
struggle," said Zandi.
On Wall Street, investors paid little attention to long-term issues and
focused more on the better-than-expected numbers, pushing major stock
indexes firmly into positive territory.