Unemployment rate falls to 7.7 percent

Despite Hurricane Sandy and the nationwide shutdown of Hostess Brands Inc., with many of the Twinkie company's 18,500 workers laid off, the nation's payrolls expanded by 146,000 jobs while the unemployment rate dropped to 7.7 percent, the U.S. Labor Department reported.

"The economy continues to improve even if the jobs data seem a bit odd given the problems created by Sandy," said Joel Naroff, chief economist of Naroff Economics.

The last time the unemployment rate was 7.8 percent was January 2008. When the recession began in December 2007, it was 5 percent.

The unemployment rate had doubled to 10 percent, by October 2009, four months after the official end of the recession, although, obviously, not the official end of the misery.

Last month, the private sector added 147,000 jobs. Government jobs declined by 1,000, with gains at the state level offsetting declines in local and federal government. The U.S. Postal Service cut 4,000 jobs in November.

Hiring was down in manufacturing and construction, but up in every other sector, with 52,600 more jobs in retailing in November, particularly in apparel stores. Other expanding sectors included information, especially motion picture and sound recording industries, which added 14,600 jobs. Jobs in publishing declined by 3,000.

Responses to Friday's report from the Labor Department reflect concerns about the looming fiscal cliff, the combination of tax increases and spending cuts that will occur if Congress cannot reach a compromise on deficit reduction by Dec. 31.

"It is discouraging that construction employment is still struggling after more three years of expansion in the overall economy," said Ken Simonson, chief economist for the Associated General Contractors of America. Construction employment dropped by 20,000 jobs, even seasonally adjusted for the weather. Unemployment in the building trades is 12.2 percent.

"As disappointing as these numbers are, they will only get worse if Congress and the White House allow huge tax increases and spending cuts to occur on January 1," he wrote in a statement.

With 12 million remaining unemployed and 4.8 million of those unemployed for more than 27 weeks, Christine Owens, the executive director of an advocacy organization for the unemployed, pressed Congress to fund extra weeks of benefits beyond the 26 weeks typically funded at the state level.

"Regardless of how it handles other aspects of the so-called fiscal cliff, Congress must renew federal unemployment insurance by the end of the year or a basic economic security floor will be ripped from under two million unemployed workers just as they enter the New Year," Owens, of the National Employment Law Project, said in a statement.

From James John's vantage point at Beyond.com, a King of Prussia online job advertising company, the best thing about the fiscal cliff from a hiring standpoint is that the nation is at the edge of it.

"Having a path to certainty where there is uncertainty is creating optimism," said John, the company's chief operating officer.

"There has been a pent-up demand to hire," he said. Companies know that one way or the other, the fiscal cliff issue will be resolved, and that will remove some of the ambiguity that causes companies to hesitate instead of hiring.

John said that job postings in November were up 100 percent over last year, both nationally and in the Philadelphia area, which portends strong hiring in the future.

That will be helpful, because economists say that 100,000 jobs must be created simply to stay even with population growth. In November, for example, that leaves a net of 47,000 new jobs to help erase a job deficit from the start of the recession in 2007 that still numbers in the millions.

Still unknown is the effect Hurricane Sandy will have on the jobs situation in the future.

"We may not know the full impact Sandy has had on employment in New Jersey for some time," said Brian Murray, a spokesman for the state's department of labor and workforce development.

"What we have at this point is the following data: Our department received about 138,661 initial Unemployment Insurance claim filings for the month of November 2012.

"To offer some perspective, we received 57,130 initial unemployment claims in November, 2010 and, in November, 2011, the figure was 54,444. Prior to Sandy hitting, we were averaging less than 30,000 initial U.I. claims per month."