WASHINGTON (Reuters) - A worrisome drop in the size of the U.S. workforce means that even with a big decline in the unemployment rate in November, it’s still not time to break out the champagne.
U.S. employers added 120,000 new jobs to payrolls last month and the jobless rate fell to 8.6 percent, its lowest since March 2009, the government said on Friday.
The pace of job creation marked an acceleration from October, and the government also revised up its job counts for September and October.
Following are some key details from the report:
* The fall in the unemployment rate was aided by 315,000 people leaving the workforce. That pushed the participation rate, a ratio of the amount of the population in the labor force, down to 64.0 percent. Those who exited the workforce, many of whom gave up on looking for work, outnumbered the 278,000 people who found jobs, according the Labor Department’s household survey, which is separate from payrolls data.
* Job creation is not spreading as widely into different sectors of the economy. The “diffusion index” for private payrolls fell sharply to 54.7 in November from a downwardly revised 59.6 the previous month. That’s the lowest since September 2010. A reading above 50 means more industries are increasing employment than decreasing employment.
* The pace of job creation was close to the consensus forecast of economists. Coupled with the upward revisions to September and October totaling 72,000 jobs, the report suggested the economy was gathering some momentum.
* Government payrolls dropped 20,000 in November. Belt tightening by state and local governments has been dragging on the economy since the recession.
* But in a more positive sign, the “Black Friday” phenomenon which fueled a boom in early holiday shopping last month coincided with retailers boosting hiring substantially to handle the demand. Retailers added 49,800 new jobs to payrolls after seasonal adjustments.
* Factories added 2,000 workers to payrolls, which was fewer than expected but still shows U.S. manufacturers bucking the global economic downturn.