msnbc.com news services
updated 12/8/2010 12:24:05 PM ET 2010-12-08T17:24:05

The nation’s unemployment rate climbed to 9.8 percent in November, a seven-month high, as hiring slowed sharply, the government’s monthly employment report showed Friday.

Major Market Indices

Overall, U.S. employers added just 39,000 jobs last month, a sharp decline from the 172,000 created in October, the Labor Department reported. The weakness was widespread, as retailers, factories, construction companies, financial firms and the government all cut jobs.

Paul Dales, U.S. economist for Capital Economics, called the November jobs report “a painful reality check for those hoping that a meaningful acceleration in economic activity was underway.”

“The truth is that the economy is going nowhere at a time when companies are not willing to boost hiring,” he said.

  1. More must-see stories
    1. The Hartford Courant, Political
      Wild Wall St.

      Has the market volatility got you nervous? These cartoons may give you a little comic relief.

    2. Cyber-thieves create fake Kelley Blue Book site
    3. US says Reebok toning shoes don't really
    4. Can you live on $9 an hour? Play the game

Government jobs fell by 11,000 last month, but private employers — the backbone of the economy — managed to rev up hiring a little in November, adding some 50,000 jobs. That was down significantly from the 160,000 private-sector jobs created in October and was the smallest gain since January.

And those job gains were not enough to drive down the unemployment rate, now at 9.8 percent. It marks the 19th straight month that the jobless rate has remained above 9 percent, the longest stretch on records going back to 1948. The previous record stretch was set in the early 1980s.

Mark Zandi, chief economist at Moody’s Analytics, said he expects the nation’s unemployment rate to soon move above 10 percent.

“If it’s not in December, it’s early next year, but I don’t see how we’re not going to get into double digits,” he told CNBC Friday.

The economy would need to consistently add 200,000 to 300,000 a month to make a noticeable dent in the unemployment rate, analysts say. It could take until near the end of this decade to drop the unemployment rate to a more normal 6 percent, they say.

Friday’s jobs report was a disappointment to economists, many of whom had predicted the addition of nearly 150,000 jobs in November.

The stock market seemed to take the bad news in stride. The Dow Jones industrial average closed up about 20 points at 11,382, not far from its post-recession high.

Economists have said the economy is moving in the right direction. After a sharp slowdown in the spring and a tepid rebound in the summer and fall, the economy is flashing signs of stronger growth in the final months of the year. That was evident in economic reports out earlier this week.

Factories are producing more. Auto sales are rising. A private report earlier this week showed the strongest private-sector job gains in three years. And applications for initial unemployment benefits hit a two-year low in November.

But these reports didn’t translate into mass hiring in November.

Friday’s report showed that there were 15.1 million people unemployed last month. Adding those unemployed people to others who are working part time but would prefer full-time jobs and those who have given up looking for work, 17 percent of the labor force is “underemployed.” That was the same as October. Still, the figure remains close to a record high set last year.

Story: For jobless '99ers,' holidays are about surviving

Another grim figure of the jobs report: There was a record 1.3 million “discouraged” workers in November. Those are persons not currently looking for work because they believe no jobs are available to them.

The White House said November’s unemployment figures underscore the importance of extending tax cuts for middle-class Americans and unemployment insurance of people who are out of work.

Story: Republicans seize on unemployment rate hike

“An unemployment rate of 9.8 percent is unacceptably high and we need to achieve robust employment growth in order to recover from the deep job losses that began over two years ago,” White House economic adviser Austan Goolsbee said in a statement.

“Today’s unemployment figures are a sad reminder of Senate Democrats’ misplaced priorities,” Sen. John Cornyn, R-Texas, who serves on the Senate’s finance and budget committees, said in a statement.

“Over the last two years they have chosen to focus on anything other than job creation and the economy, and the agenda for the lame duck session has been no different,” he added.

The Associated Press and Reuters contributed to this report.

Video: Weak jobs report catches many off-guard

  1. Closed captioning of: Weak jobs report catches many off-guard

    >>> good evening. this morning a reporter spotted something and thought it was strange that there was no marine guard standing guard at the white house , because there normally is when the president is in residence. then we learned he wasn't home. he was in fact landing in afghanistan. he made a secret overnight flight to visit the troops and meet with the president of that country. the problem for president obama , even while flying halfway around the world , he still could not escape some very bad news in the form of a very big number back home. today, we learned the unemployment rate has gone up, right on top of the holiday season . it's grown to 9.8% from 9.6%. bad economic news in an already bad economy. we've asked both white house correspondents to join us. first, to the economy and nbc's savannah guthrie . savannah, good evening.

    >> reporter: good evening, brian. this jobs report came out while the president was still in the air. there had been a lot of hope around here that we were finally going to see a good jobs number. instead, this unemployment report was like a punch in the gut. with the president overseas, it was up to vice president joe biden to act to an unemployment report.

    >> there is still no denying that the report is disappointing, because we were quite frankly hoping for an even stronger job growth .

    >> reporter: wall street was expecting the economy to add 150,000 jobs last month. instead, it added just 39,000. and despite strong retail sales , including a big black friday kickoff to the holiday shopping season, the retail sector lost 28,000 jobs, leaving some analysts to question whether the report could be trusted.

    >> the general tone of the economic data had been pointing up over the last four to eight weeks and this number stands in dark contrast to that other data.

    >> reporter: white house aides only argue for middle class tax relief. following the house's lead, senate democrats plan to hold symbolic votes tomorrow, to extend lower tax rates for middle class fam less only. but the measure will fail without the support of republicans who are holding out for tax relief for all taxpayers, including top earners. today, visibly frustrated democrats turned up the rhetoric.

    >> it's almost like the question do you negotiate with terrorists.

    >> reporter: but republicans said it was democrats wasting time.

    >> it's too risky to aim for partisan opportunities. the clock is ticking.

    >> it will come to order.

    >> reporter: the president's bipartisan deficit commission came up three votes shy of the support needed to get its drastic budget cutting and revenue raising plan before congress. but the commission's leaders hope they had given a push to lawmakers.

    >> please, i really am pleading with you, please make the tough choices.

    >> reporter: one other economic note tonight, the u.s. and south korea have reached an agreement on that free trade agreement . this is the deal both countries had tried and failed to get in seoul, south korea last month, brian.

    >> savannah guthrie starting us off from the north lawn tonight.

Interactive: Unemployment by the numbers

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 2.43%
$30K home equity loan FICO 5.80%
$75K home equity loan FICO 4.54%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.57%
13.57%
Cash Back Cards 17.91%
17.91%
Rewards Cards 17.15%
17.15%
Source: Bankrate.com