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Unemployment Falls To 8.6 Percent

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Photo by Tim Boyle/Getty Images.

Editor’s note, 11:22 am EST: all figures have been checked and confirmed against the now-available BLS data.

It seems we aren’t the only ones hanging on every number from the Bureau of Labor Statistics this morning. The site has been mostly down – or just flooded – since the month’s unemployment numbers were officially released at 8:30 am. Finally, though, after hitting “refresh” for almost an hour, our Making Sen$e reporter/producer, Elizabeth Shell, broke in for a few minutes. The site promptly crashed. But her short glimpse of some of the numbers show they are about as good as promised.

That is, reports all week suggested that job creation was on the upswing. Friday’s November report confirmed it. 120,000 new jobs created.140,000 in the private sector (government lost 20,000 jobs). Numbers to make a free market enthusiast beam. Plus, upward revisions of 20,000 jobs for October and a whopping 52,000 in September alone.

Paul Solman U7 November 2011

Meanwhile, the official unemployment rate, known as U-3, dropped to 8.6 percent. The dark side of this datum, however, seems to be that the official labor force in November was 315,000 fewer Americans than in October.

Since we know of no mass emigrations last month, nor fatal epidemics, a plausible explanation is that the 315,000 are a statistical anomaly – the numbers are inferred from a sample of 60,000 households, remember. Another possibility is that a whole lot of Americans who were looking for work in the past year passed the 12-month mark in November and are thus no longer counted in even the broadest reckoning of unemployment. Indeed, they’re dropped from the official count of the workforce as a whole.

Making Sense

We did manage to compute our monthly U-7, the most comprehensive under- and unemployment number out there, although we offer it only provisionally, since we can’t be sure that we saw the numbers long enough, or that they were correct. If so, though, U-7 dropped from 18.18 percent to 17.64 percent.

On Friday night’s NewsHour, we run a piece just shot in Nashville, Tenn., in which the brewer of Yazoo Beer and folks at the Old Hickory baseball bat company explain why they are hiring.

“We’ve hired two full-time employees this year just to keep up demand for our beers,” Linus Hall of Yazoo told us. “We think our business will continue to grow next year, so probably around the middle of the year we anticipate having to hire a couple of extra people.”

The rest of the story is about money still “on the sidelines.” But maybe, just maybe, the new numbers suggest that money is being mobilized at long last.

Here’s a roundup of comments from other sources, some of whom may have high-frequency trading computers that have managed to access the BLS site this morning for more than a few seconds.

Wall Street Journal’s MarketWatch: Yet the decline in the labor force is belied by other evidence showing that companies continue to add workers at a modest pace. The increase in hiring in November was accompanied by revisions in the October and September data that show an additional 72,000 jobs were created.

What’s more, the labor force had increased by nearly 1 million people in the three months before November, suggesting that more jobs are available. People tend to reenter the labor force when they think they have a better chance of finding a job.

Financial Times: In further evidence that the U.S. economy has regained a little vigor in the last few months, the Federal Reserve’s latest Beige Book survey found “slow to moderate growth” across most of the country.

The employment report from ADP, the payroll processor, beat economists’ expectations of 125,000 new positions over the month and was the largest gain in nearly a year. ADP also revised up the number of new jobs added in October to 130,000.

The New York Times: “If you go back to August, all sorts of people were telling us that the economy was headed straight into recession,” said Paul Ashworth, senior United States economist at Capital Economics. “Since that point, we’ve become more and more worried about the euro zone and other areas of the global economy, but somehow, at least for the moment, the U.S. economy seems to be shrugging all that off.”

Still, concerns remain about the economy’s ability to withstand these international dangers.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions _Follow Paul on Twitter._

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