Despite Drop in Unemployment, We're Still a Long Way Off from Recovery

By aaroncynic in News on Dec 2, 2011 8:20PM

The unemployment rate dropped below 9 percent in November, the lowest it has been in two years. The rate dipped .04 percent and non-farm payroll employment added 120,000 jobs, according to a report from the Bureau of Labor and Statistics. Still, 13.3 million Americans remain unemployed.

CNN Money reports less than a third of the 8.8 million jobs shed over the past few years have been recovered and 43% of the unemployed currently counted have been without work for at least six months.

Even though such a drop in unemployment is a good sign on the surface, the picture isn’t all that rosy. One of the biggest factors in November’s unemployment figure is that more than 300,000 people were taken off the rolls because they effectively stopped looking for work. This puts the real unemployment rate somewhere around 15.6 percent. In addition, while the Labor Department adjusts numbers to account for seasonal trends, the biggest boost in hiring came from retail sales, Outside the Beltway notes. In other sectors of the economy, hiring is still in the negative.

Long term, we’re still a long way out of the woods on meaningful economic recovery. Until we start seeing more jobs outside of the service sector, growth will remain slow if not stagnant. As the Tribune writes:

Weak job growth means companies don't have to raise pay to keep their employees. Fewer jobs and lower pay leaves consumers with less money to spend. That's holding back economic growth.