Labor market figures show modest signs of growth into 2013

unemploymentThe month of November featured the highest level of job openings in five months. The total of 3.68 million was an increase by 11,000 compared to the month of October. Though the gains are modest they are positive signs that the U.S. economy might be heading on the right track to a more robust recovery.

Brian Jones, senior economist at Societe General in New York, commented that labor market indicators all point towards improvement. In total, 155,000 jobs were added in December and 161,000 in November. Perhaps more importantly than the sheer number gains in jobs added is the fact that the hiring was accompanied by gains in wages and a longer workweek. What further adds to this positive trend is the unemployment rate, which in November stood at 7.7% – the lowest level in more than four years. Some economists believe that if the unemployment rate continues to drop at this pace it will reach about 7.1% by the end of 2013.

One problem that continues to linger, however, is that of discouraged workers who are not considered part of the labor force and therefore technically not “unemployed”. The labor participation rate in November stood at 63.6% – a figure that according to Nigel Gault of HIS Global Insight remains low by historical standards. In fact, much of the improvement in the unemployment rate over the past two years can be attributed to people dropping out of the labor force. In some ways, determining how to decipher the statistics released by the Department of Labor becomes a question of interpretation with the bigger question of an American economic recovery still lingering.

Posted by: Samuel Benka

Sources: Bloomberg, TIME, The New York Times

Photo credit: 2008 Fall Career Days 005 courtesy of Flickr user pennstatelive

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