Unemployment jumped to 9.8% in November; slow job growth blamed

The nation’s unemployment rate crept back up toward double-digit levels last month, rising to 9.8 percent after being stuck around 9.6 percent for much of the year, the Labor Department reported Friday morning.

The worsening of joblessness reflected a sharp slowdown in new jobs created by businesses during the month. Only 36,000 jobs were added to payrolls after a 172,000 surge in new jobs in October. That was less than half the average 86,000 new jobs created each month in the last year, the department said.

At the beginning of the important Christmas selling season, retailers actually shed 28,000 jobs rather than adding to their staff, contributing to the depressed job outlook. Manufacturing employment also declined by 13,000 after having posted gains earlier in the year.

The main industries to add jobs during the month were health services and temporary employment, where jobs grew by 23,000 and 38,000, respectively.

The disappointing job news comes after other reports in recent days suggested that the employment market was picking up, including a trend down in new claims for unemployment benefits and a robust gain in small business jobs reported by the ADP payroll processing firm. World markets are set to decline on the unexpectedly sour job outlook.

“Pretty disappointing,” said Jeff Kleintop, chief market strategist at LPL Financial. “We’ve heard so much lately about retailers having to hire more folks ahead of the holiday season, yet retail jobs dropped… . A bit of a surprise there.”

Eric Green, chief economist at TD Securities, said the jobs scene was stronger than portrayed by the report because a sharp increase in jobs reported by employers during the month was revised down by the department using seasonal adjustment factors that anticipated an even bigger increase in jobs.

“You had a very, very strong month last month,” when you look at the unadjusted jobs figures, he said. “The trend is still very, very positive. I would not want to over-read this as a sign of weakness,” he said. “The headline looks to be quite weak, but I would not rush to judgment and suggest that this is a disaster.”

Adding to the unexpectedly poor labor conditions, the average workweek stagnated at 34.3 hours, while average hourly earnings crept up only 1 cent to $22.75, the department said.

The jump in unemployment was spread across all ethnic groups, but was particularly sharp among Latinos. The Hispanic jobless rate surged to 13.2 percent from 12.6 percent in October.

“The labor market sputtered in November,” said Heidi Shierholz, analyst at the Economic Policy Institute. “The hoped-for progress in the labor market is not materializing.”

Ms. Shierholz said the report set some “grim benchmarks,” including a 5.1 percent unemployment rate for people with college degrees — the highest in 40 years — and a 19-month stretch of joblessness above 9 percent that is the longest since World War II.

Jobs are so difficult to find that an unprecedented number of people has been out of work for six months or longer. Congress allowed jobless benefits for those people to expire this week — a decision the report is likely to prompt legislators to reconsider, analysts said.