JIM LEHRER: Unemployment fell in November, and so did the number of jobs lost. That upbeat report came today, as President Obama touted a major speech on job creation next week.
Judy Woodruff has our lead story report.
JUDY WOODRUFF: The numbers from the U.S. Labor Department came in far better than most economists expected. November’s unemployment rate fell to 10 percent, from last month’s 10.2 percent. And the economy shed just 11,000 jobs, a vast improvement from October’s revised total of 111,000.
At a congressional hearing today, the head of the U.S. Bureau of Labor Statistics, Keith Hall, agreed it was good news. But he also pointed out, many of the nation’s total of 15 million unemployed have given up looking.
KEITH HALL: The number of discouraged workers in November was 861,000, up from 608,000 a year earlier. These individuals are not currently looking for work because they believe no jobs are available to them.
JUDY WOODRUFF: Today, President Obama toured a metalworks factory in Allentown, Pennsylvania. He called the slowdown in job losses modestly encouraging, but he said businesses won’t really expand until banks make it easier to borrow money.
U.S. PRESIDENT BARACK OBAMA: Part of what our message to the banks is, the taxpayers were there for you to clean up your mistakes. You now have a responsibility to be there for the community, now that we’re bearing the brunt of a lot of these problems that you caused.
JUDY WOODRUFF: Next Tuesday, the president will outline ideas for a new jobs bill in a Washington speech.
But Republicans warned again today, the president’s policies would actually slow the recovery.
REP. JOHN BOEHNER, R-Ohio, house minority leader: The first thing that has to happen is that the job-killing agenda that the president supports that’s moving through the Congress has to be stopped.
JUDY WOODRUFF: In the meantime, the jobless rate could resume climbing next year. Several private surveys this week projected a new wave of job cuts in the next few months.
Wall Street made only modest gains today, despite the jobs report. The Dow Jones industrial average added 22 points, to close near 10389. The Nasdaq rose 21 points, to close at 2,194. For the week, the Dow gained nearly 1 percent. The Nasdaq rose more than 2.5 percent.
And for more on what to make of today’s jobless numbers, we turn to two economists who follow the labor market closely. Lisa Lynch is dean of the Heller School at Brandeis University and a former chief economist at the Labor Department. And Nariman Behravesh, chief economist at IHS-Global Insight, an economic and financial consulting firm.
Welcome to you both.
Lisa Lynch, to you first.
What did you make of these numbers when you saw them?
LISA LYNCH, dean, Heller School for Social Policy and Management, Brandeis University: Well, when I first looked at the numbers this morning, I had to double-check and make sure I didn’t read the numbers incorrectly, in particular, the fact that the job loss number was only 11,000.
And seeing the unemployment rate number drop as well, when most people thought that that was going to stay the same, that was a wow moment. And — and, actually, when you went into the report, there was even more good news. We saw increases in employment in the temporary help industry.
We saw that hours of work increased. Both hourly wages increased, weekly wages increased — so, lots of very good news both on the front-line numbers and as we probed more into the report looking at what was happening in terms of employers’ behavior.
JUDY WOODRUFF: Nariman Behravesh, surprising for you, too?
NARIMAN BEHRAVESH, chief economist, IHS Global Insight: Somewhat, although, you know, we have been saying that soon, fairly soon, in the next two or three months, we start to see improvements in the jobs market. It’s just happened a little sooner than we thought. That was the surprise.
That said — and I agree this was a very good report — it’s entirely possible that, in the next couple of months, we could actually see an upward blip. Now, that doesn’t mean that the recovery is over or we’re going back into recession. It just simply means these things don’t move in a straight line. They tend to bounce around.
But we’re either at or very close to a turning point, in terms of the jobs recession.
JUDY WOODRUFF: Nariman Behravesh, did you see some of the same specifics in here, though, that are positive, as Lisa Lynch pointed out?
NARIMAN BEHRAVESH: I completely agree. And she pointed out a number of things. Let me just add to that.
The last two months, the numbers were revised upward. That’s always a good sign. We’re actually seeing jobs growth in some of the service sectors, you know, things like business services growing, in terms of adding jobs, health care adding jobs. These are all very good signs.
So, indeed, as you dig deep into this report, there’s a lot of things to feel good about.
JUDY WOODRUFF: At the same time, Lisa Lynch, how do you know this is not just a fluke or just a seasonal thing going on?
LISA LYNCH: Well, the numbers are seasonally adjusted by the Bureau of Labor Statistics. And, as Nariman pointed out, it is important to note that the previous two months’ employment report numbers were revised, and so that the job loss was not as great as previously reported.
So, between this report, what we are seeing in terms of the weekly unemployment insurance claims data, all of these numbers are — are telling us that we’re at that bottom, we’re at that turning point. And we will see some bouncing around as we’re here on the bottom, but I think there’s strong evidence that we’re at a turning point in the labor market, and the hemorrhaging of jobs is close to the end.
JUDY WOODRUFF: Nariman Behravesh, how much of a turning point do you think it is? I mean, one economist today actually called this a game-changer.
NARIMAN BEHRAVESH: I think that’s a bit of an exaggeration. I think a turning point is a better analogy here and a better description.
I — we basically are close to, if not at, that point at which job losses will pretty much end, job gains will begin. But I will caution that our view is that this recovery is going to be fairly modest, it’s going to be fairly slow, and the job gains will be fairly slow, which means the unemployment rate is going to come down very gradually over the course of the next year.
So, in that sense, often, what I say these days is, yes, it’s a recovery. It may not quite feel like a recovery.
JUDY WOODRUFF: So, Lisa Lynch is it still the jobless recovery, that — that term everybody’s been using?
LISA LYNCH: Well, we — we’re — we have to acknowledge the fact that, even though the unemployment rate dropped, it’s still at 10 percent.
And, if you add in the number of people that are working fewer hours because the employers cut their hours, or, as was mentioned at the top of the story, that there are more discouraged workers out there, we have over 17 percent of the work force that’s underemployed.
So, we have — we’re at a — I think a turning point, but at a very low level of activity, in terms of the labor market. So, in order to recover and to get back to where we were at the start of this recession, we’re going to have to either see fabulous growth, let’s say on the order of 5.5 or 6 percent per year for the next three years, or job — monthly job increase numbers over 300,000 a month, again, for the next three years to get the unemployment rate back to where it was.
And no one that I know is forecasting such robust growth for the economy. So, it’s going to take a long time to recover from the depths of where we are.
JUDY WOODRUFF: Is that the — the trajectory, Nariman Behravesh, that you are looking at as well?
NARIMAN BEHRAVESH: Very much so.
In fact, we would be surprised, for example, if the unemployment rate at the end of next year, 2010, is below, let’s say, 9.5 percent. I think we will be lucky to get there. And then, beyond that, it will come down very gradually.
You have to realize, in terms of the job losses, we’re in a very deep hole. It’s going to take a long time to climb out. I mean, one way to look at this is, the job losses from this recession are roughly the same as the job losses from the last four recessions all put together. So, this is a very bad recession.
JUDY WOODRUFF: Let me ask you both, President Obama is going to be holding this — or going to be speaking next Tuesday, outlining a — a new jobs proposal, something that he says will jump-start business to get them to hire.
Lisa Lynch, what could the administration do that — that you think could make a difference?
LISA LYNCH: Well, I — I think it’s time to take a page out of the playbook of the Federal Reserve, that threw everything it could, in terms of monetary policy, at this crisis.
And I think, at — at this stage in the recovery, to ensure that we have a speedier recovery in the labor market, we have to do a variety of things. We have to extend unemployment insurance to those people that have been out of work for a long period of time, which almost 40 percent of workers have been out of work for six months or more.
We have to increase the amount of money that we’re allocating for job training. With so many people out of work for a long period of time, their skills have depreciated. They need skills training.
And then we need to give assistance to small- and medium-sized businesses. They rely mainly on the banks for — for their financing. Those employers are starting to hire. They’re a big part of job creation at the beginning of a recovery, and they really need assistance in terms of financing, so that they can go out and hire new workers.
JUDY WOODRUFF: Nariman Behravesh, just 30 seconds here. What would you add, if anything, to that, that the administration can do that would make a difference?
NARIMAN BEHRAVESH: I would say add a tax credit, probably a temporary one, a year or two, that would encourage small and large companies to hire new workers, and to add to their payrolls, if you will.
Companies are sitting on a mountain of cash. They’re scared to spend it because they’re worried about the recovery. We need to tease some of that money out, get them to start to rehire.
JUDY WOODRUFF: Nariman Behravesh, Lisa Lynch, we thank you both.
LISA LYNCH: Thank you, Judy.
JIM LEHRER: Economists who attended the president’s job summit yesterday offer ideas for creating new jobs. That’s on our Web site, newshour.pbs.org.