The nation’s bleak job market scored a much-needed psychological boost yesterday after the unemployment rate fell to the lowest level in more than 2.5 years.
The jobless rate fell 0.4 percent to 8.6 percent in November, the first time it has been below 9 percent since March 2009, according to data released by the Labor Department.
The labor report said that employers added 120,000 jobs in November, after a 100,000-job gain in October.
While it’s hardly breakneck growth, the drop in the unemployment rate marked the biggest decrease since January, when it fell from 9.4 to 9.0 percent.
Nevertheless, economists said the latest figures showed only modest improvement and cautioned that the beleaguered economy is still facing some stiff head winds on its long road to recovery.
“It’s good news for this month but there’s a long way to go,” said Jonathan Basile, economist at Credit Suisse.
“At this current pace of job creation, we won’t be back to the peak levels of job creation in January 2008,” he added.
Some economists also pointed out that part of the decline in the jobless rate was the result of a shrinking labor force as opposed to more people getting jobs.
Indeed, some 315,000 people stopped looking for jobs last month. According to yesterday’s labor stats, 278,000 people scored jobs, while 594,000 fewer people were unemployed.
Also still casting a massive shadow on the jobs market are worries that Europe may be facing a recession that could hit US shores.
“The US and Europe are tied at the hip,” said Mark Zandi, chief economist at Moody’s Analytics. “The US can withstand a modest European recession, but we cannot digest a longer recession in Europe.”
