Cautiously Optimistic About 10% Unemployment

Unemployment dropped to 10% in November as employers cut only 11,000 jobs. It's very solidly good news: the labor force participation rate was basically unchanged, which means we're seeing an actual decline in the unemployment rate, not a spike in the number of people leaving the labor force because they can't find a job. The very large number of people working part time for economic reasons didn't fall significantly--but it didn't get much bigger, either.

That's not to say that we're out of the woods yet. Presumably we got a little boost as seasonal hiring ramped up--and whlle the numbers are seasonally adjusted, the adjustments are never perfect. We also face a lot of unknowns, like what will happen as commercial real estate starts to unravel and foreclosures ramp up again. Even larger questions, such as "when will the Fed start getting serious pressure to tighten?" are even harder to answer.

Nonetheless, this is basically unalloyed good news. And we don't get all that much of it around here these days.