WASHINGTON, Dec 3, (AFP): The US jobless rate surged to 9.8 percent in November, a hammer blow to the economic recovery and to President Barack Obama’s hopes for a quick end to high unemployment.
The world’s largest economy created many fewer jobs than expected and the unemployment rate rose from 9.6 percent to its highest level since April, the Labor Department reported.
A measly 39,000 jobs were created during the month, well short of the 130,000 predicted by economists and well beneath the levels needed to dent unemployment rates.
Job losses in the retail and manufacturing sector led the decline as the employment market once again proved unable to untether itself from the long-ended recession.
The jobless rate has remained above nine percent for the last 19 months, leaving more than 15 million jobseekers unemployed.
The White House, under pressure to prove its economic policies are working, acknowledged the unemployment rate was “unacceptably high.”
Massive government stimulus plans, while alleviating the worst ravages of the downturn, have failed to bring unemployment levels into line with those seen over the last decade.
But Austan Goolsbee, one of Obama’s top economic advisers, warned it was “important not to read too much into any one monthly report.”
“Although the overall trajectory of the economy has improved dramatically over the past year, there will surely continue to be bumps in the road ahead such as this,” he said.
The White House also pointed to a private sector that is still creating jobs, albeit at a slower rate than desired.

“Today’s employment report shows that private sector payrolls increased by 50,000 in November, lower than expectations, but continuing eleven consecutive months of private sector job growth,” Goolsbee said.
While the high rate of joblessness is a constant worry for the eight-plus million Americans who lost their jobs during the crisis, policymakers are increasingly concerned about how long the trend has persisted.
With nearly 40 percent of the jobless unemployed for more than six months, fears are growing that high jobless rates may be more than a temporary result of a brutal recession.
“Today’s jobs report marks the 19th consecutive month in which unemployment has exceeded nine percent, an unacceptable result,” said Eric Cantor, a leading Republican lawmaker in the House of Representatives.
He urged Congress to extend Bush-era tax cuts that critics argue the deficit-ridden country can ill afford, but which supporters argue will help spur the recovery.
“Congress should reassure job creators and investors by taking the impending tax hikes off the table,” Cantor added.

With Congress frozen by partisan politics and gripped by fears about US debt levels, Obama has hoped to lower the unemployment rate by clinging to what government stimulus still exists.
The White House warned that Congress’s refusal to extend unemployment benefits would damage the economy as two million Americans will see their incomes slashed.
Goolsbee said Congress must also extend tax cuts for the middle class.
“Failure to do this would jeopardize hundreds of thousands of additional jobs, and leave millions of Americans, who are out of work through no fault of their own, on their own.”
On Friday the Labor Department raised its estimates of job creation in October from 151,000 to 172,000, a hike that was of little succor to markets.
“Despite some upward revisions, the headline number was wildly off, and wildly disappointing,” said Jason Schenker, president of Prestige Economics.
Joel Naroff, president of Naroff Economic Advisors, said December’s employment figures would probably show a rebound.
“We shouldn’t panic,” Naroff said. “In any recovery, it is not smooth sailing.”
Still, the report was a reminder that the economic recovery is proceeding more slowly and fitfully than many economists had expected. It is likely to push lawmakers before year’s end to pass an extension of long-term unemployment benefits, which expired this week.
“November’s U.S. employment report is a painful reality check for those hoping that a meaningful acceleration in economic activity was under way,” said Paul Dales, U.S. economist for Capital Economics. “The truth is that the economy is going nowhere at a time when companies are not willing to boost hiring.”

Private companies — the backbone of the economy — created only 50,000 jobs. That was down significantly from the 160,000 private-sector jobs created in October and was the smallest gain since January.
Other reports out Friday offered mixed signals for the economy:
n The service sector, which employs approximately 80 percent of the U.S. work force, expanded for the 11th straight month in November and at the fastest pace in six months. The Institute for Supply Management says that its service-sector index rose to 55 last month from 54.3 in October. It was the highest reading since May. Any figure over 50 indicates growth.
n Orders to U.S. factories fell in October by the largest amount in five months, reflecting a sharp drop in demand for aircraft, the Commerce Department said. Excluding the transportation equipment, orders were down a smaller 0.2 percent.

There were 15.1 million people unemployed in November.
Adding those unemployed people to others who are working part time but would prefer full-time jobs and those who have given up looking for work, 17 percent of the labor force is “underemployed.” That was the same as October. Still, the figure remains close to a record high set last year.
Another grim figure: There was a record 1.3 million “discouraged” workers in November. Those are persons not currently looking for work because they believe no jobs are available to them.
Last month, retailers slashed 28,100 jobs. Factories sliced 13,000. Financial firms cut 9,000 and construction companies trimmed 5,000. The public sector eliminated 11,000 positions, mostly reflecting cuts from local governments.
Those adding jobs: health care, with 19,000 new positions, mostly at hospitals. Temporary-help firms added 40,000 jobs, educational services companies added 6,200 positions, and leisure and hospitality expanded payrolls by 11,000.
The economy needs to add at least 120,000 jobs to prevent the unemployment rate from rising. To reduce the unemployment rate significantly, monthly job creation has to be a lot stronger — up to 300,000 new jobs a month.
Economists say it could take until near the end of this decade to drop the unemployment rate to a more normal 6 percent.

Before the lame-duck Congress adjourns later this month, lawmakers are expected to pass legislation renewing aid to the unemployed.
Extended benefit programs that provide up to 99 weeks of extra aid to the unemployed expired at the end of November because Congress failed to extend them. Nearly 2 million stand to lose unemployment benefits as the holiday arrives.
Meanwhile, Canada’s unemployment rate edged down 0.3 percentage points to 7.6 percent in November, its lowest since January 2009, Statistics Canada said Friday.
Some 15,000 jobs were created in the month, the government agency said, slightly less than analysts had expected.
November saw employment gains in health care and social assistance, retail and wholesale trade, along with accommodation and food services. These were however mostly offset by declines in manufacturing as well as in finance, insurance, real estate and leasing, officials said.
Part-time gains were also partly offset by decreases in full time employment.