November's 7 Percent Jobless Rate Beats Expectations
STEVE INSKEEP, HOST:
NPR's business news starts with the surprising unemployment numbers.
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INSKEEP: And let's talk about this better-than-expected jobs report with NPR's Yuki Noguchi, is in our studios. Hi, Yuki.
YUKI NOGUCHI, BYLINE: Good morning, Steve.
INSKEEP: OK, so how good was it?
NOGUCHI: Well, there were 203,000 new jobs added to payroll this last month. That's according to a survey of businesses and government. There's another separate survey of households that show that 818,000 more people worked last month than the previous month. That's an enormous monthly gain. A lot of people went back to work because the government shutdown ended, of course. But people were also simply able to get work, and that's why you saw the jobless rate decline from 7.3 percent to 7 percent. And that is the lowest level it's been in exactly five years.
INSKEEP: And three-tenths of a percent, I mean that's actually quite a lot of a drop for a single month.
NOGUCHI: That's true, yeah. It's bigger than we've seen.
INSKEEP: And let's be fair. It may be adjusted again, we don't know. But it seems to be going in the direction that would people would like it to be going. But let's talk about the quality of the jobs that are being added. What sorts of jobs have they been?
NOGUCHI: Well, they are tend to be the good, higher-paying jobs. There were big gains in health care, manufacturing, professional business services. Another indication that people are getting paid more is that average hourly earnings for all employees also rose.
INSKEEP: Let's talk about another factor here, Yuki Noguchi, because sometimes when the unemployment rate goes down, it may not be that more people are going back to work, it may be that people are going out of the labor force, and so the percentage seems to improve but things aren't really improving. Did that happen this time?
NOGUCHI: No, not this time. I mean, one of the interesting things that, you know, we've been seeing is a lot people went back to school during the recent years when the labor market was troubled. And, you know, what's interesting to me is that the people who are getting the jobs now are college graduates. So the unemployment rate for college graduates went from 3.8 percent to 3.4 percent last month. For those with a high school diploma or less, the unemployment rate didn't change, and the jobless rate for those folks is two to three times higher.
INSKEEP: Wow. That's a pretty dramatic difference. So you're saying that the labor force participation, the percentage of people in the country who are out there either working or looking for work, that's actually gone up. It didn't decline this time.
NOGUCHI: It did go up slightly, yes.
INSKEEP: OK, and the number of jobs is actually in some absolute sense, as best we can determine from these statistics, also going up. Now, are there indications that the problem of long-term unemployment is changing very much? There have been many millions of people who have been out of work for six months or far more.
NOGUCHI: Yeah, that's right. That's the persistent problem. There are now four million people who have been out of work for six months or more, which is down by more than two million from the peak. But the average time people are unemployed is still more than 37 weeks. That's about twice as long as what it is in a normal recovery. And emergency unemployment benefits are set to expire on December 28th unless Congress decides to extend that.
INSKEEP: Oh, OK. So there's one question that is going to come up here. Congress hasn't done much of anything this fall, and the questions is whether they would extend those emergency unemployment benefits. People will be asking if this makes that more or less likely.
NOGUCHI: Yeah. I mean, it's sort of, you know, we are seeing steady improvements in the long-term unemployment problem, so that's an argument. But, on the other hand, there's still a lot of people who are long-term unemployed.
INSKEEP: OK, and a few seconds left here. The Federal Reserve also weighing when to draw down its massive intervention in the economy.
NOGUCHI: That's right. They've been pumping $85 billion a month into the economy by buying bonds to keep interest rates down. They want to pull that back but they don't want to do that sooner than the economy is ready. So this good report may mean that the Fed could wind that down sooner. But of course the Fed has to balance that out against another big concern, which is the fiscal gridlock in Washington. And, you know, politicians basically just kick the can down the road, and those budget debates are set to begin after the holiday. So this makes it a tougher call.
INSKEEP: Yuki, thanks as always.
NOGUCHI: Thank you, Steve.
INSKEEP: That's NPR's Yuki Noguchi.