South By North Strategies, Ltd.

CHAPEL HILL (December 3, 2010) – Despite expectations to the contrary, the national employment situation deteriorated in November. Last month, employers added just 39,000 more positions than they eliminated, while the unemployment rate rose to 9.8 percent.

“The November employment contained almost no positive news,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “While total payroll employment rose slightly due to some private-sector hiring, the gain was far short of the level needed to keep abreast of workforce growth, let alone bring down joblessness.”

In November, the nation’s employers added 39,000 more payroll positions than they cut. Gains occurred primarily in the private sector (+50,000), while government payrolls fell by 11,000 positions due primarily to cuts at the local level. Additionally, the payroll employment numbers for August and September were revised upwards; with the revisions, the economy gained 148,000 jobs over those two months rather than the 110,000 positions previously reported.

Private-sector gains in November occurred in professional and businesses services (+53,000, primarily in the temporary help services sub-industry), education and health services (+30,000), and leisure and hospitality (+11,000). Private-sector losses occurred in manufacturing (-13,000), trade, transportation, and warehousing (-13,000); financial activities (-9,000); and construction (-5,000). All other private-industry groups experienced little or no change in November.

“The November employment report is evidence that the recovery is bypassing the job market,” noted Quinterno. “The current pace of growth will not bring down joblessness anytime soon.”

Weak conditions were reflected in the November household survey. Last month, 15.1 million Americans (9.8 percent of the labor force) were jobless and seeking work. Proportionally more adult male workers were unemployed than female ones (10 percent vs. 8.4 percent). Similarly, unemployment rates were higher among Black (16 percent) and Hispanic workers (13.2 percent) than among White ones (8.9 percent). The unemployment rate among teenagers was 24.6 percent. With the exception of teenagers, unemployment rates for every major demographic group were higher in November than in October.

Furthermore, newly available data show that 8.6 percent of all veterans were unemployed in November; the rate among recent veterans (served after September 2001) was 10 percent.

“There remains a tremendous amount of idle labor in the American economy,” added Quinterno. “Compared to a year ago, a smaller share of the civilian population is participating in the labor force. The proportion of the population that is underemployed also has remained consistently at or near the November level of 17 percent.”

Jobs remained difficult to find in November. Last month, 41.9 percent of unemployed workers had been jobless for at least six months with the average spell of unemployment lasting for 33.8 weeks. Compared to a year ago, there were more people marginally attached to the labor force (2.5 million, up from 2.3 million).

“The November employment report should serve as a wake-up call for policymakers,” observed Quinterno. “The pace of economic recovery is too sluggish to reverse the problem of joblessness. Without more aggressive policy action, cyclical job losses are apt to crystallize into permanent ones. Millions of Americans are at grave risk of being pushed permanently out of the job market.”