Unemployment Declines Modestly To 10% In November

The national unemployment rate decreased by 0.2% in November to a seasonally adjusted rate of 10.0%, according to the Bureau of Labor Statistics. That's better than consensus expectations that the rate would remain unchanged. The U.S. economy lost only 11,000 more jobs during the month, putting the number of unemployed Americans at 15.4 million. November's numbers come as a relief after a disastrous 0.4% increase in October. Although the national rate remains in double digits, a mere 11,000 job losses is the fewest in a month we've seen during the recession.

Here's how BLS shows the unemployment rate's progression over the past two years:

Nov 2009 unemp 1.PNG

And here's its chart of actual job losses:

Nov 2009 unemp 2.PNG

As you can see from that chart, the real story here is how few jobs were lost. Although this number remains negative, if this trend continues, there's little doubt that we'll be in positive territory before long.

A few of the industry bright spots included professional and business services, which saw a gain of 86,000 jobs. Department stores also added 8,000 jobs, no doubt in preparation for the holidays. Education and health services continue to appear recession proof, adding 40,000 jobs. Finally, the government hired 7,000 more people.

Even if you disregard seasonality, the unemployment rate still went down, from an adjusted rate of 9.5% in October to 9.4% in November. So seasonality did play a role here, but it's far from the whole story. As the chart below shows, this month's data brings the seasonally and non-seasonally adjusted rates a little bit closer together:

Nov 2009 unemp seasonality.PNG

A little bit worrying is the change in unemployment duration. As chart below shows, compared to October, November had more workers unemployed for longer and fewer jobless for a shorter time.

Nov 2009 unemp duration.PNG

Perhaps the most disappointing kernel of news in this report is the discouraged workers number. It increased by 53,000 Americans to 861,000. That marks the highest number we've seen in the recession, after a hefty rise last month:

Nov 2009 unemp discouraged.PNG

Despite this increase, it should be noted that the seasonally adjusted national unemployment rate including discouraged workers also declined by 0.2% from 10.7% to 10.5% from October to November. The even broader measure of unemployment including those unemployed marginally attached persons, but for reasons other than discouragement, fell from 11.6% in October to 11.3%. If all marginally attached workers, including discouraged, were included in the unemployment rate, it would add another 2,323,000 Americans to the ranks of the unemployed.

Finally, the poll results didn't fare too well this month either. Only 5% of respondents accurately predicted 10.0% as November's rate. That's even worse than last month's 9%. Here are our poll's full results: