The unemployment rate dropped from 10.2% to 10% for November. Economist thought that the rate would maintain 10.2% for November so the news I’m reading is overly positive about the .2% drop. Most of these same economist however thought the unemployment rate would peak at 10.2% in February of 2010 but we saw that number 4 months earlier in October of this year. So forgive me if I am cautiously optimistic.
According to the New York Times, Allen L. Sinai, the founder of the research firm Decision Economics, said, “It is like a patient after having collapsed with a heart attack sitting up and taking a breath—nothing more than that.” Mr. Sinai also said, “Things are getting better, but a one-month respite, frankly, means nothing in the context of the worst labor market ever seen since the 1930s.”
Don’t get me wrong I’m very happy anytime the unemployment rate goes down. I just think it’s going to be a long haul back down. It is possible that after the holidays that we go back to 10.2% or more in January or February. The Fed expects the jobless rate to remain between the range of 9.3% and 9.7% for another full year. The Fed thinks that we will stay above 8% for all of 2011. This new “normal” is still hard to swallow for over 17% of the job force who is either unemployed or underemployed.
Still, November was the best showing we have had in two years. Losing just 11,000 jobs in November is much better than the 111,000 jobs we lost in October. It can’t even compare to the 300,000 plus jobs per month we were losing every month from September of ’08 through July of this year. This is indeed encouraging.
If the unemployment rate hit its peak last month at 10.2% I will be grateful. But even if we have a few months to go before a true peak is reached at least we know that we have hit the bottom of this jobless hole. The problem of course is we have dug such an enormous hole it will take years to dig ourselves out.
Once we actually start gaining jobs on a consistent monthly basis I believe the spirit of America can begin to heal. It will take a long time to get back to anything close to a 5% unemployment rate. But, just knowing that things are getting better than getting worse in the job market will pay huge financial, psychological and emotional dividends for our country.