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.
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.
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.
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.
“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.