Unemployment Rate Drops to 8.6%

The nation’s unemployment rate fell to 8.6 percent during the month of November, as employers added 120,000 new jobs to their payrolls, the ""U.S. Department of Labor"":http://www.bls.gov said Friday.

By ""the government’s calculations"":http://www.bls.gov/news.release/empsit.nr0.htm, the unemployment rate declined by 0.4 percentage point from 9.0 percent reported in October to hit its lowest level since March of 2009.

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Analysts at ""IHS Global Insight"":http://www.ihsglobalinsight.com were expecting the economy to add 125,000 new jobs last month, but the rate to hold at 9.0 percent.

Earlier this month, IHS published the graphic above, illustrating its projections of how long it will take each state to return to peak levels of employment.

Employment assessments for both October and September were revised upward. The Labor Department says total nonfarm payroll employment rose by 210,000 jobs in September rather than the 158,000 previously reported. October’s numbers were revised from 80,000 new jobs to 100,000.

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Still, the 72,000 more jobs than previously thought over past months isn’t enough to cut the unemployment rate by forty basis points.

Much of the drop can be explained by the fact that those who’ve been unemployed for extended periods are no longer counted as part of the Labor Department’s unemployed population as they become ineligible to claim unemployment benefits.

The Labor Department’s report does indicate that the size of its measurable labor force contracted by 315,000 persons.

Commenting on the latest numbers, Ed Delgado, CEO of the ""Five Star Institute"":http://www.thefivestar.com, said, “While the decline in the national unemployment rate is significant [40 basis points] the comprehensive view of employment, or U6 rate, that includes all marginally attached to the labor force, remains high at 15.6 percent and 60 basis points higher than a year ago.”

Delgado went on to explain, “Some of the decline can be attributed to seasonal employment trends as we approach the holidays and we remain cautious that a one month decline of this magnitude does not necessarily suggest a sustainable trend ... that said, the abrupt decline is an impressive one-month reduction in unemployment.”

The analysts at ""Capital Economics"":http://www.capitaleconomics.com agree with that assessment. The sharp drop-off “is another illustration that the U.S. economy is, for now at least, shrugging off the global economic downturn and fears about the collapse of the euro-zone,” they said in a research note published Friday.

_*Editor's Note: The Five Star Institute is the parent company of DS News and DSNews.com._